Saturday, April 16, 2011

Nudge, Push, Shove

Until recently, economists have assumed that people make rational decisions to further their own self-interest. Thus, in  a free market, individuals making their own rational choices would produce the greatest economic benefit for all.

If some individuals choose to behave irrationally, the marketplace would ultimately exact a price.

It’s fairly clear that the thesis comes down to us from the Enlightenment.

Before the triumph of Reason in Western civilization, theologians and philosophers assumed that we were beset by temptations to do ill or evil, and that only the most rigorous controls could set us on the path to righteousness.

This theory of human motivation has not exactly died out. Freud himself revived it and marketed it to generations of intellectuals. Freud is not a nobody. When it comes to theories of human motivation he has exercised considerable influence.

I will not speak for the field of economics, but psychology and the ambient culture has been saturated with theories of human motivation that assume the worst.

When I read Jonah Lehrer’s summary of the latest supposedly scientific discoveries about how the human mind makes decisions, I was, like him, skeptical. Link here.

In Lehrer‘s words: “For the last few hundred years, a simple assumption has dominated economic thinking about human nature: We are rational creatures. When faced with alternatives, we carefully maximize our utility, just like those hypothetical agents in the Econ 101 textbooks.

“Unfortunately, the latest research on the mind demonstrates that a whirligig of emotions, instincts and biases, many of which operate outside conscious awareness, shapes our behavior.”

Those who claim a new level of scientific understanding about how the mind works, have presumed-- and it is indeed a presumption-- that they can use their knowledge to influence the way people behave and the kinds of decisions they make.

What we have here is nothing less than an intellectual parlor trick. Or better, a ruse designed to seduce you out of your freedom and dignity.

People like former law professor, current Obama administration czar, Cass Sunstein, claim merely to want to establish public policies that will nudge you in the direction of good behavior.

But, why do we need Cass Sunstein to tell us what we should or should not do? Or to try to exercise subliminal influence on our decisions? And why should they assume that science tells anyone what he should do. As David Hume famously pointed out, science does not contain ethical precepts. It tells us what happened, not what we should do.

According to the new behavioral economists, the human mind, beset with irrational tendencies leading it to make bad decisions, needs a nudge, a push, or a shove in the direction of making better decisions.

Sunstein and Richard Thaler wrote a book called Nudge, where they present their reasons why they should be allowed to manipulate your decisions.

It may not feel very good, but Sunstein and Thaler assure us that it's for our own good. And also, for the good of society. What could be wrong with that?

If you believe this, you have just kissed your freedom goodbye. While you’re at it, say goodbye to your dignity.

This new improved theory pretends that you do not know what is best for you, and that a class of philosopher-kings, your guardians, do. While they do not yet have the power to force you to make the best decisions, they can arrange the world to discourage you from making the bad decisions that you would make if you were left to your own devices.

It’s almost not worth underscoring, but this theory makes law professors and behavioral economists  the final arbiters what is best for you.

It feels like a puppetmaster theory: you are being called on to allow other people to pull your strings, subtly perhaps, but if you do not respond to the first little tug, you can be fairly certain that the pull is going to increase.

After all, it’s for your good.

What’s wrong with this theory? Why has it not, as Lehrer reports, led to the desired outcomes?

This is not too difficult to answer. Any time a human being feels that another human being, be it a friend or a family member or an agent of the State, is trying to manipulate him, he will naturally and normally push back.

When you feel manipulated, you feel that someone is trying to diminish your freedom and your self-respect. Then, you will naturally and normally assert your self-respect by refusing to do what you are being induced to do.

Lehrer explains that many of the more conspicuous efforts to nudge people toward the straight and narrow have produced just the opposite effect.

When New York restaurants were forced by our Nanny mayor to list the number of calories in each dish, New Yorkers pushed back: they consumed more calories.

These theories pretend to be new and they pretend to be based on scientific authority.

But they fail to acknowledge that people do not like to be nudged, pushed, or shoved toward doing anything. They may accept an effort to persuade them, but if you are trying to seduce and manipulate them, they are more likely to make it a point of pride to do otherwise than what you are suggesting.

When I said that this all feels like an intellectual parlor trick, I meant that it was an effort to talk you out of your freedom, with your full consent.

The theory’s primary defect lies in its presuppositions. It introduces a moral dimension into what is supposed to be scientific research.

It assumes the rational decisions are good and irrational decisions are bad. But it also assumes that what we take to be rational decisions are always rational while what we take to be irrational decisions are always motivated by our emotions and impulses.

To say the least, this is dubious.

You may be a law professor or a behavioral economist and you may decide rationally that people would be better off if you were nudging, pushing, or shoving them toward what you consider best for them.

Is this really a rational thought? To me it sounds like unbridled arrogance. It sounds like you are setting out in search of other minds to control.

Does this mean that I aspire to nudge, push, or shove you back toward the light of reason? Not at all. I will merely present a counterargument, along with Lehrer’s evidence that efforts to nudge people in one direction most often end up pushing them in another.

Also, irrational thoughts, the messages we receive from our emotions or impulses are not necessarily bad or deceptive. We should know by now that seemingly irrational fears are often based on real dangers that our rational mind has not yet grasped.

What feels irrational might be a perfectly rational judgment. It might even be a correct judgment.

Why does it remain outside of the grasp of rational thought? Perhaps if we knew what was causing us to be afraid or anxious, we would have to do something about it, and, sometimes we are not prepared to take action.

As for the value of what seems to be irrational thought, how many times have you heard some important executive, like Warren Buffett or Jack Welsh, claim that they base their decisions on their gut feelings. Aren't they advising us to follow intuition, not rationality?

As it happens, this is misleading. Research has shown that executives make good decisions when they are dealing with problems that are well within the zone of their experience.

If you are the most experienced and knowledgeable boat builder, you will be able to make decisions about boat building without having to go through as many steps as would someone who has less experience.

When an experienced boat builder is facing a decision about trading pork belly futures, he should absolutely not go with his gut.

Those who want to nudge, push, and shove us in the direction that they feel is best are not simply denying us the ability to make free decisions, but they are saying that they do not trust our judgment.

If that is true, they would not have any real use for good old trial-and-error reasoning?

Shouldn't we all be allowed to make their own mistakes, to learn from them without having some agent of the State hovering over them, making them think that if they make up their own mind they will necessarily choose evil over good.  

If someone is going to eat unhealthy food, his body and his health is going to send him a message, to the effect that this stuff is bad for you. Doesn't eating the wrong foods exact a price, and aren't people motivated to change behavior when the price becomes too high?

Not because they are being forced to mend their ways, but because the risk/reward ratio may tip away from bad food.

Can this individual be trusted to examine the evidence, recognize that his effort to nourish himself with Twinkies and Cheez Doodles has damaged his body? If we allow him that judgment, there is always the chance that he will choose to continue on with his junk food. If his assessment of risk/reward makes it make sense, then his body will eventually offer the most persuasive counterargument.

Would you prefer that we give Cass Sunstein and Richard Thaler control over what is on offer at the local supermarket or restaurant?

As the evidence suggests, if the czars and czarinas decide to ban one thing or to nudge us away from it, we will either run to it or will find an equally unhealthy substitute.

Not because we want to damage our health, but because we want to maintain our feelings of pride and dignity in our own ability to make our own decisions.

Of course, we influence the behavior of other people all the time. Or, at least we try. Can we do it, and should we do it, without nudging, pushing, or shoving them? I believe we can.

First, we need to get over the idea that the alternative to nudge, push, and shove is a free-for-all, descent of society into a Hobbesian jungle. The real alternative is to recommend a different course of action while respecting the freedom and dignity of the other person.

The easiest way to encourage someone to do better is to set a good example.

All individuals are free to emulate or not to emulate others, but that is not the same as pushing them in this or that direction.

And then there is the art of persuasion via rational argument. If we want to persuade people to take one course of action, we may well try to present some good reasons why they should.

This does not nudge them or push them or shove them in the direction. It leaves the decision up to them. It assumes that are rationally concerned with their own self interest, and that, left to their own devices, they will come to the right conclusion. There is always the chance that they might not, but it is more likely that they will make a good decision if t hey do not feel that they are being nudged, pushed, shoved, or forced.


David Foster said...

Wrote a post about Sunstein and the other Nudges here: the scribes and the idea of freedom.

Retriever said...

Good post, Stuart. I've always felt that people have to learn for themselves. Particularly on food as individuals vary so much (what suits one person may make another person fat or sick, even within families), and the dietary dogmas change from year to year. People should practice moderation, and be sceptical of extreme claims by Food Industry Hacks and Greenie Twits alike. Personally, I've always used my grandmother's advice as a more sane guide...:) (she lived to be 94, despite smoking and drinking and eating a dish of ice cream and lotsa red meat every day!)

Avoiding the Deadly Sin of Gluttony is also a good idea (tho hard in my houshold, where four of us love to cook)

I used to try to set a good example, but it doesn't really work. I like vegetables (I grow them), hiking miles and miles, spend hours outdoors, going to church, socializing, cooking from scratch, yadda yadda yadda. But I am short and no healthier than my husband over six foot who hates veggies, church, is solitary and will probably bury me! The point is, we are both very healthy, but one size doesn't fit all as far as health habits or even diet and exercise requirements. This is the fallacy behind national guidelines.

ALtho I do think the mesomorph, gardening, cooking, outdoorsy, opinionated WASP women in my family tend to live a LONG time...

Stuart Schneiderman said...

Thanks, David, for the link to your excellent post. I am somewhat embarrassed that I missed it, but I do hope that everyone follows the link and takes a look at it.

And thanks, also Retriever. As we all know, this concern for everyone's health is just a stalking horse for more substantive control over behavior-- like preventing you from using the light bulbs you wish or banning plastic bags. All of which are ways to force people to live according to the dogmas of modern liberalism... and to make any opposition to those dogmas into heresy.

The Ghost said...

When faced with alternatives, we carefully maximize our utility, just like those hypothetical agents in the Econ 101 textbooks.

“Unfortunately, the latest research on the mind demonstrates that a whirligig of emotions, instincts and biases, many of which operate outside conscious awareness, shapes our behavior.”

The first paragraph is a strawman argument ... economists have never assumed rational behavior ... what they have assumed is that EVENTAULLY we will make rational choices, often after making many irrational choices in the meantime ...

because we are always involved in feedback loops we make decisions and measure results which colors our next decision ...

We can have all of the emotions, instincts and biases, many of which operate outside conscious awareness we want but eventually, if you are not menatlly disfunctional, you will adjust those emotions, instincts and biases and come to more rational decisions.

The old cliche, a liberal mugged by reality comes to mind ...

Stuart Schneiderman said...

Actually, that was what I was trying to say... thanks for the clarification.