About the Talk
Economics has come to be a fundamentally technocratic project: it is driven by a faith in the ability to predict human behavior in the service of improving economic well-being. This includes economics as practiced by people on both sides of the left/right divide. Those who favor “less” government as much as those who favor “more” of it appeal in equal measure to predictions about how state actions will affect people’s behavior. Such predictions necessarily ignore a factor that is inherently unpredictable (at least to a significant extent): human ideas.
As Herbert Simon forcefully pointed out decades ago, the idiosyncratic—yet non-random—ideas of individual agents may cause them to react unpredictably in response to a given set of objective incentives. As if to avoid dealing with this problem, economists have typically adopted two diametrically opposed strategies. The first, microeconomic theory, collapses the ideational space between incentives and actions by treating incentives as if they produce actions automatically, without the intercession of fallible and idiosyncratic processes of interpretation. The second, positivism—for example, behavioral economics and experimental economics—replaces incentives with any objective “factor” that an economist might think to correlate with behavior. However, like micro theory, positivism ignores the role of interpretation. This can be seen, for example, in experimental economists’ assumption that the correlations produced in a randomized trial will be externally valid among individuals who may interpret their situations differently than did those in the field test.
From these observations, at least two questions would seem to follow. Why is it that economists in particular, like social scientists in general, have ignored the role of ideas in human behavior? And what might an economics, or a social science, look like that does not repeat this mistake?
About the Speaker:
Jeffrey Friedman is a visiting scholar in the Charles and Louise Travers Department of Political Science at the University of California, Berkeley and the Max Weber Fellow of the Institute for the Advancement of the Social Sciences at Boston University. He is the founder and editor of Critical Review: A Journal of Politics and Society.
He taught in the Government department at Dartmouth College in 1998, the Social Studies program at Harvard from 1998 to 2000, and the Political Science department at Barnard College, Columbia University from 2001 to 2006.