Home
/
RELIGION & LIBERTY ONLINE
/
Economic man is a myth, but ‘nudging’ is a distraction
Economic man is a myth, but ‘nudging’ is a distraction
Apr 25, 2026 1:33 PM

The University of Chicago’s Richard Thaler recently won the Nobel Prize for his contributions in behavioral economics, much of which centers on challenging rational choice theory.

“Renowned for his use of data to observe and predict how people behave in the real world,” writes Derek Thompson, “Thaler’s career has been a lifelong war on Homo economicus, that mythical species of purely rational hominids who dwell exclusively in the models of classical economic theory.”

Victor Claar has helpfully summarized Thaler’s work at length, noting his popular framework of “nudge units, which provide a government mechanism for prodding us into “making choices that are better than the ones we might make otherwise.” Claar rightly challenges us to consider the risks of promoting the government as “nudger-in-chief,” and Rev. Ben Johnson offers at least one example of the type of destruction that “nudging” sometimes promotes. Alas, as economist David Henderson reminds us, we’d do well to apply Thaler’s same theory of irrationality to the nudgers who nudgers.

This isn’t to say that behavioral economics as a science is of little value, nor that its applications will only lead to economic disaster. Indeed, in its most basic intellectual assumptions, Thaler’s “lifelong war on homo economicus” offers a healthy correction: Man is not a robot.

In many ways, the economic planners of yore have ignored that reality, using rational man as in put that distortsour public policy, perverts our incentives, and lead to economic ruin. In turn, this leads us to ignore the social and spiritual side of the human person, excusing away our thoughts and affections at the mercy of a cold and limiting earthbound order.

What’s more important, however, is whether those lessons are applied before and beyond the battles about public policy and government intervention.

In Thaler’s case, the goal of es next, distracting us from the broader implications. In doing so, he risks the same mistakes of the rational-choice theorizers, but in the other direction, treating humans as pawns to be moved or consumers to be manipulated.

So if “nudging” isn’t the obvious next step, how are we to respond in a world wherein economic man is now myth?As Father Sirico writes in the concluding chapter of his book,Defending the Free Market, we do so simply by pursuing and preserving freedom (and using that freedom rightly):

In real life, people are motivated by much more than what economists describe as “maximizing utility” – especially where “utility” is understood in narrowly materialistic terms. The economic truth of economic man is true enough (you ignore human self-interest and the laws of supply and demand at your peril), but it is not the whole truth about who human beings are.

Any man who was only economic man would be a lost soul. And any civilization that produced only homines economici to fill its markets, courts, legislative bodies, and other institutions would soon enough be a lost civilization. Familial love, voluntary dedication to philanthropy and faith, the creation of art and music would be at their most minimal level, and whole sectors of life pletely vanish…

The good news is that by rolling up our sleeves and digging for the truth, by retrieving a right understanding of the human person, we can turn things around. The tradition that gave birth to a morally animated liberty—not merely the power to do what onewantsbut the right to do what oneought(as Lord Acton observed)—is not a tradition of mere utility, selfishness, pleasure-seeking, or determinism. Freedom rightly understood is not a license to behave like spoiled adolescents but rather the noble birthright of creators made in the image of God. As long as we refuse to sell this birthright for a mess of materialist pottage, hope remains.

As humans created in the image of God, destined to glorify him in all that they do, our actions will often depart from the tidy boxes and categories of modern academia and economic science, even in the case of Thaler’s cutting-edge paths to “predictability.”

Psychology matters, but how do we account for the roles of Word and Soul and Spirit? Thaler and others in his pioneering discipline are doing us a great service in dismantling false notions of economic man, but how we respond to that reality demands a great deal more than good psychology and clever political game-playing.

It requires freedom, and with that freedom, the will to chooselove – “rationally,” “irrationally,” and otherwise.

Image: Behavioural Economics, Chatham House (CC BY 2.0)

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Court: Nuns Must Comply with ObamaCare’s Contraceptive Mandate
Earlier today,the U.S. Court of Appeals for the Tenth Circuit ruled that the Little Sisters ply with the government’s mandate to providecontraceptives for employees.The district courtruled the Little Sisters cannot receive a full exemption from the law’s contraception rules because they“do not substantially burden plaintiffs’ religious exercise or violate the plaintiffs’ First Amendment rights.” The nuns disagree. “As Little Sisters of the Poor, we simply cannot choose between our care for the elderly poor and our faith,” saysSr. Loraine Marie...
7 Figures: America’s Views on the First Amendment
What do Americans think about the freedoms guaranteed by the First Amendment? The Newseum Institute attempt to find out in their annual national survey of American attitudes about the First Amendment. Here are seven figures you should know from the survey: 1. When asked to name the five specific freedoms in the First Amendment, 57 percent of Americans name freedom of speech, followed by 19 percent who say the freedom of religion, 10 percent mention the freedom of the press,...
Pope Economically Confused in Bolivia
Today at the Library of Law & Liberty, I examine Pope Francis’s recent speech in Bolivia, in which he calls for “an economy where human beings, in harmony with nature, structure the entire system of production and distribution in such a way that the abilities and needs of each individual find suitable expression in social life.” I have no objection to that, but what he seems to miss is that the very policies he criticizes all characterize those countries in...
Katie Steinle and the Morality of Sanctuary Cities
The moral obligation of society regarding illegal immigrants remains at the center of the political debate on immigration. Numerous questions surround the proper “status” for illegal immigrants, how the state should respond, and the responsibility of American citizens over various humanitarian concerns. Article I, Section 8 of the bined with numerous Supreme Court rulings, has established that the federal government has “plenary power” over immigration and is solely entitled to make laws in accordance with this authority. These laws establish...
Islamic State Wages War on Religious Freedom
With each passing day, the news is inundated with images of murder from the Islamic State. Anyone they target suffers not only death, but often a horrifically slow and tortuous one. What President Obama considered to be a “JV” team proves to consist of professionally petent warriors bent on annihilating their foes. These terrorists attack any opponent who stands in their way, but reserve particular hatred and brutality for Christians. The war they wage is as much of a military...
Fujimura on Cultivating the Imagination
“The cultivation of imagination is to begin to integrate life into faith and every other facet, whether mundane or extraordinary, whether 9-5 work realities or worship in a church. Imagination is key to the thriving God intends for us.” –Makoto Fujimura The burgeoning faith-work movement has does a fine job of re-orienting our perspectives about the meaning of everyday toil and the importance of stewardship in the area of work and creative service. Butone area that continues to sufferneglectis that...
An Economics Ode to Joy
In the weeks since the June 18 release of Laudato Si, the discussion has bifurcated into the realms of prosaic, progressive pantheistic pronouncements that Earth requires tender ministrations post haste on one hand. On the other hand, there are those who assert the encyclical gets it right on the value of protecting human life but miserably wrong when Pope Francis identifies free-market economics as greed’s handmaiden intent on destroying the planet for a quick buck. Never mind whether you ascribe...
Does Walmart Do More for the Global Poor than the Vatican?
In reply to Pope Francis’s recent criticism of free market capitalism, AEI’s Mark Perry provides a provocative response. Not only do free markets do more to reduce world poverty than the Catholic Church, says Perry, one pany—Walmart—had done more for the global poor than the Vatican: I would argue that free market capitalism, American style, has done more to reduce world poverty than any anti-poverty efforts of the Catholic Church and the Vatican. In fact, I would even argue that...
3 Things I Wish Pope Francis Knew About a Free Economy
Pope Francis has said that he’s generally “allergic” to financial matters. Yet that hasn’t stopped him from criticizing capitalism and suggesting radical changes for a global economic order. During his recent trip to Latin America, the pontiff has been especially denunciatory, saying the unfettered pursuit of money is “the dung of the devil.” Not surprisingly, many critics plained that Francis is presenting a distorted, plete, and naive view of capitalism. To his credit, the pontiff has vowed to consider these...
Economists as Engineers of Markets?
A bit of humility is in order. Alvin E. Roth to Russ Roberts on EconTalk: … I think that economists have to approach their role as engineers with great humility. There’s a lot we don’t understand. Economics is still an early science. But let me read you the quote from Hayek that I included in my book. This is a quote from his free-market manifesto, The Road to Serfdom. And he wrote, “There is, in particular, all the difference between...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved