Home
/
RELIGION & LIBERTY ONLINE
/
Economic man is a myth, but ‘nudging’ is a distraction
Economic man is a myth, but ‘nudging’ is a distraction
Mar 21, 2026 2:04 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
5 concepts from Frederick Bastiat you should know
Today is the 214th birthday of Frederick Bastiat, one of the greatest political and economic thinkers of the 19th century. Bastiat, a farmer turned politician and pamphleteer, had a inimitablegift for explaining economic and political concepts in way that make them not only understandable but seem monsensical. Bastiat, as Charles Kaupke notes, drew on his Catholic faith and the writings of Adam Smith and John Locke to articulate a vision of limited, efficient government that respects each citizen’s God-given dignity....
Big Oil Advocacy for Carbon Taxes
Today at The Federalist I explore “Why Big Oil Wants A Carbon Tax.” Perhaps such advocacy isn’t just made out of a sense of global citizenship and environmental stewardship. On the surface such advocacy may seem counter-intuitive. Why on earth, other than out of selfless benevolence, would a firm (or group of firms) advocate for higher taxes on their products? But on reflection, it makes some sense, and the reasoning is similar to why an online retailer like Amazon might...
Are We Better Off if We Buy Local?
Over the past few decades buying locally produced goods and services over those produced farther away has e increasingly fashionable. However, this “modern” trend is really a reversion to an earlier period when most all products were produced and bought from people in a localized area. For most of human history, “buying local” was the only option. There may be many reasons we may want to buy local goods and services—but improving the local economy is not one of them....
Salt of the Encyclical: A Call to Culture
“Laudato si, mi’ Signore!” Both the title and first line of the most recent papal e from St. Francis’ canticle which looks at nature as a great gift, but you all know that. Every news source worth its salt made that clear before the encyclical was released (either time); yet, we as Christians are called to be salt of the Earth. This entails more than a brief glance at the word on the street about the ecological pronouncement. What is...
Taxing Churches (and other Charitable Non-Profits) is Un-American
Within 48 hours of the Supreme Court issuing its diktat on same-sex marriage, there were already calls for religious organizations that oppose gay marriage to lose their tax-exempt status. But Mark Oppenheimer goes even further. The writer of a regular column on religion for the New York Times argues in Time magazine that “the Supreme Court’s ruling on gay marriage makes it clearer than ever that the government shouldn’t be subsidizing religion and non-profits.” There is a lot that could...
For This Car Wash, Autism is a ‘Key Competitive Advantage’
“We view autism as one of our petitive advantages,” says Tom D’Eri of Rising Tide Car Wash in Parkland, Florida, which employs 43 employees, 35 of which are on the autism spectrum. “Our employees follow processes, they’re really excited to be here, [and] they have a great eye for detail.” Hear more of theirstory here: Among adults with autism, the unemployment rate is around 90%, and yet, if you were to ask D’Eri, whose brother has autism, the market is...
Mahoney: New Václav Havel biography is ‘moving and intelligent’
Daniel J. Mahoney reviewed Michael Zantovsky’s 2014 book Havel: A Life in the City Journal last week, calling it “a remarkable book about plex and genuinely admirable human being.” Václav Havel was a Czech writer, philosopher and dissident who served as the first democratically elected president of Czechoslovakia and then the first president of the Czech Republic. Zantovsky’s “moving and intelligent book guarantees that Havel’s monumental achievement will not soon be forgotten,” Mahoney writes. As Zantovsky shows, Havel was “one...
‘El Papa es imprudente al hablar de conjeturas científicas’
Sirico appearing on InfoBae TV in March. While at Acton University not too long ago, Buenos Aires journalistAdrián Bono sat down with Rev. Robert Sirico to discuss Laudato Si’. Bono recently wrote about his interview with Acton’s president and co-founder at Infobae. “Muchos no saben que la encíclica depende de la hermenéutica,” Sirico argued, “que significa cómo puede interpretada. No es un documento infalible.” Simply put, Laudato Si’ is not a binding document for Catholics, but many don’t understand that....
Unsanctified Mercy: Integrating Compassion and Conviction for Human Flourishing
Compassion is a marvelous virtue. Feeling concern for others and acting sacrificially — especially on behalf of those that cannot return the favor — reveals mature character and contributes to human flourishing. Compassion moves missionaries and monks to great efforts as they plant churches, pioneer institutions, and work for justice across cultures and geographies. Paul’s words are the motivation for his apostolic proclamation that, “…the love of pels us…” and, “one died for all, therefore all died. And those who...
Explainer: What is Going on in Greece?
What’s going on in Greece? Greece is defaulting on a key debt owed to the munity—and the Greek government is putting the question of whether the country will default on even more government debt up for a popular vote this week. How did Greece get into such a financial mess? Too much debt. For the past twenty years the government of Greece has spent more than it has collected in taxes. Wait, that can’t be all there is to it....
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved