Home
/
RELIGION & LIBERTY ONLINE
/
Economic man is a myth, but ‘nudging’ is a distraction
Economic man is a myth, but ‘nudging’ is a distraction
Jan 2, 2026 10:03 AM

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
What exactly is the unemployment rate?
Note: This is post #98 in a weekly video series on basic economics. If someone has a job, they’re defined as “employed.” But does that mean that everyone without a job is unemployed? Not exactly. For the official statistics, you have to meet quite a few criteria to be considered unemployed in the U.S., explains economist Alex Tabarrok. In this video by Marginal Revolution University, Tabarrok explains how unemployment is officially defined by the federal government. (If you find the...
Radio Free Acton: Hot, dirty, noisy: Purposeful work at Kerkstra Precast; Media blackout on Gosnell movie
On this episode of Radio Free Acton, award winning news anchor Anne Marie Schieber speaks with James Morgan about his job at Kerkstra Precast, an industrial plant. We get a look into James’ daily work and how he finds meaning and motivation in what he does. Then, Caroline Roberts talks to Phelim McAleer, co-producer of the newly released film “Gosnell: The Trial of America’s Biggest Serial Killer,” successful with audiences but since it’s release the film has faced harsh backlash,...
Manna and the land: God’s methods of miraculous provision
Throughout the Bible, we see miraculous moments of God’s immediate provision. He provides manna and quail for the Israelites in the wilderness (Ex. 16). For Elijah, he uses ravens to deliver bread and meat and later supplies daily meal and oil (1 Kings 17). He provides wine for the wedding at Cana (John 2). He multiples loaves and fishes among Jesus’ disciples to feed a crowd of five thousand (Matthew 14). Yet if God is able to intervene and provide...
The spiritual core of political hate
“A new study confirms that creeping tribalism has Americans bitterly divided, acrimonious, and dismissive of others based on political differences,” says Rev. Ben Johnson in this week’s Acton Commentary. “Behind this animosity lies a spiritual principle that Rev. Timothy Keller touched on during his address at this year’s Acton Institute annual dinner.” The problem, Keller said, is that people chose a “modern identity” by defining pletely with one, selected characteristic or feeling. Often, it is a profession, especially high-status careers...
The spiritual core of political hate
A new study confirms that creeping tribalism has Americans bitterly divided, acrimonious, and dismissive of others based on political differences. Behind this animosity lies a spiritual principle that Rev. Timothy Keller touched on during his address at this year’s Acton Institute annual dinner. Keller, pastor of Redeemer Presbyterian Church in Manhattan, offered his insights in a lecture he titled “Identity, Business, and the Christian Gospel” – but its lessons go to the heart of every human being. Who am I?...
Rev. Tim Keller on the myth of omnicompetence
One of the dangers of forming a modern identity around achievement is what Rev. Tim Keller calls “the success-failure whiplash.” Succeeding in one area can cause people to believe they have the skills and inner qualities to do anything, and everything, alone – that they are petent. Keller discussed the process in his address to the Acton Institute’s 2018 annual dinner, which he titled “Identity, Business, and the Christian Gospel”: If your identity has e your business and your profession,...
The enduring influence of Russell Kirk’s ‘The Conservative Mind’
This is the seventh in a series celebrating the work of Russell Kirk in honor of his 100th birthday this October. Read more from the serieshere. Back in the glory days of the Reagan years, I considered myself a rather hard-core libertarian. My mom—one of the most brilliant and well-read persons I have ever known (and ever will)—was a devout Goldwaterite and munist. She read everything under the sun, and she encouraged me to do the same, never censoring anything....
Why we have a moral obligation to promote innovation
Note:This article is part of the ‘Principles Project,’ a list of principles, axioms, and beliefs that undergirda Christian view of economics, liberty, and virtue. Clickhereto read the introduction and other posts in this series. The Principle:25A — We have a moral obligation to promote innovation. The Definitions: Innovation –Something (i.e., an idea, method, process, product, service, tool, etc.) that isnew, original, or improved which creates value and is uniquely useful. (Source) Human flourishing – A holistic concern for the spiritual,...
The nation-state and security of freedom
In a recent article for Law and Liberty, Samuel Gregg, Acton’s Director of Research, reviews French political scientist Gil Delannoi’s new book Le nation contre le nationalisme. “Since 2016,” Gregg writes, “it has e evident that millions of people are not content to be herded, sheep-like, by intellectuals, techno-utopians, and supranational bureaucrats down the path of global governance. Their discontent is being expressed through a renewed emphasis upon the nation and an associated stress on nation-state sovereignty.” This emphasis on...
Rev. Tim Keller on how the modern identity presents problems for life and business
On October 17, Rev. Timothy Keller delivered a keynote speech to a sold-out audience at the Acton Institute’s 2018 Annual Dinner. In his address, Keller explains the concepts of “traditional identity” and “modern identity” and their prevalence in present-day culture. Modern identity, claims Keller, presents serious problems for the contemporary business world. Keller presents the Gospel as the answer to modern issues of identity. From engaging work by scholars such as Charles Taylor to reciting lyrics from Disney’sFrozen, Keller’s municates...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved