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 15, 2026 11:56 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
‘Lifestyle Taxes’ — Political Camouflage for New Federal Sin Taxes
Recently the Acton Institute pulled back the political camouflage of the Lifestyle Tax, a new tax under consideration by the Senate Finance Committee, and exposed it as an extension of the Sin Tax. The Senate Finance Committee is considering levying the Lifestyle Tax to raise funds for President Obama’s health care plan. Reverend Robert A. Sirico, president and co-founder of the Acton Institute, wrote an article on the Sin Tax and the proposal of expanding it to tax soft drinks....
Bonhoeffer Questions Justice
I had the privilege of lecturing at last week’s Acton University on the topic of Lutheran Social Ethics. In preparing for that session, I was struck again at just how “Lutheran” Dietrich Bonhoeffer sounds every time I read him. Here’s an example. Last week I asked, “Whither justice?” and noted some of Luther’s words on the subject. Here’s Bonhoeffer, from Life Together, virtually echoing Luther: What does it matter if I suffer injustice? Would I not have deserved even more...
Forced Purchases of Health Care Will Crush Many
Today, the Wall Street Journal published a letter I wrote to the editor opposing mandatory health insurance. This solution would burden the poor beyond their means, and it would deny the principle of subsidiarity by sacrificing family economic decisions to the priorities of federal legislators. Here is the text of the letter: “Sen. Ron Wyden’s plan to make every uninsured American buy health insurance makes about as much sense as would forcing every poverty-stricken and starving Haitian to buy food...
Interview with Stephen McEveety, Producer of ‘The Stoning of Soraya M.’
Tomorrow, June 26, theaters across the nation will begin screening for the general public “The Stoning of Soraya M.” This drama reenacts the true story of an Iranian woman falsely accused of adultery and punished according to sharia law. The film is produced by Stephen McEveety (“The Passion of the Christ”) and features an impressive international cast. Since the movie’s title gives the climax away, rest assured that the film contains much that is suspenseful. Jim Caviezel portrays French-Iranian journalist...
How fast a reader are you?
For Father’s Day last Sunday, I asked for and was given Mark Levin’s book Liberty and Tyranny. It’s only 205 pages if you don’t count the footnotes, but it’s Wednesday and I’ve only read 47 pages and the Epilogue, and the type is big and pages only 6” x 9”. I’m not a fast reader. Dennis Prager admits to reading lots of things out loud and I have a tendency to do the same thing, especially if I want to...
Allen and Novak on Caritas in Veritate
There has been much mentary, and debate on Pope Benedict’s much anticipated encyclical on the economy Caritas in Veritate (remarkable for a statement that has not yet been released). At the PowerBlog, we will keep you informed on what is being said about the encyclical and, when it is released, we look forward to providing great coverage. Two of the most mentaries came from John Allen Jr. in the National Catholic Reporter and Michael Novak in First Things. In Allen’s...
The Call of the Entrepreneur is Obvious
The Obvious Expert, a blog for Empowering Coaches, Consultants and Entrepreneurs, gave a great review for The Call of the Entrepreneur today in their blog post. The Obvious Expert demonstrates that the film teaches that the call to e an entrepreneur is a spiritual calling: But the film is not a critique of entrepreneurs; far from it. Instead, Rev. Robert A. Sirico of the Acton Institute likens the calling that leads visionary men and women to e entrepreneurs to something...
Acton Commentary: Veterans First on Health Care
Amongst the health care debate Ray Nothstine offers a good analysis of Verterans Health Care. Nothstine brings a good argument to light for those to consider who are in support of reforming health care. Many supporters of reforming health care look to the health care provided by the Veterans Administration (VA); however as Nothstine is able to demonstrate, the VA health care system is far from perfect. Nothstine also provides real life situations that demonstrate the flaws of the health...
Movie Review: Gran Torino Works
Clint Eastwood’s 2008 project Gran Torino has recently been released on DVD, and what a delight it is. Eastwood plays Walt Kowalski, a Korean War vet and retired auto worker whose wife has just passed away. I was unable to catch the film in theaters, despite my desire to do so. Based in Michigan, Gran Torino was filmed places like Royal Oak, Warren, Grosse Pointe, and Highland Park. As the production notes state, “Though the screenplay was initially set in...
Sin, Responsibility, and the Fall of Bernie Madoff
Only if there are new human beings will there be a new world, a renewed and better world. When the Pope said these words at Vespers on Sunday, perhaps he had Bernie Madoff in mind. Today, Madoff was sentenced to 150 years in prison for defrauding his investors of nearly $65 billion over the course of 20 years. His corruption and crimes ruined the livelihoods of thousands of businesspeople, charity workers, and families that trusted his sterling reputation to protect...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved