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 6, 2026 8:34 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 Facts about adult illiteracy
Adult illiteracy is one of the most overlooked socio-economic problems in America. Illiteracy can increase unemployment and povertywhile lowering family stability munity flourishing. Here are five facts should know about adult illiteracy in America: 1. Illiteracy is the inability to read or write. plete illiteracy is relatively rare among native English speakers in the U.S., a significant percentage of Americans are functionally illiterate. A person is considered functionally illiterate when they cannot engage in all those activities in which literacy...
Krauthammer’s legacy: tribalization foretold
A review of “The Point of It All: A Lifetime of Great Loves and Endeavors” by Charles Krauthammer, edited by Daniel Krauthammer, Crown Forum, NY, 2018, 360 pp., $28. Among the many voices of contemporary quiet reason in the public square, Charles Krauthammer most certainly ranked in the higher echelon. When he announced his impending death in June 2018, it was assumed correctly that his silence would be deafening. Who else could so passionately yet so remarkably rise to persuade...
Trust in employers and CEOs is soaring, but can they really ‘save the world’?
Our cultural environment has e increasingly defined by social isolation and public distrust, aggravated by a number of factors and features, from declines in church munity participation to concentrations of political power to the rise of online conformity mobs to the corresponding hog-piling among the media and various leaders. Yet as public trust continues to fragment and diminish across society, there’s one institution that appears to be making eback: private employers. According to the Edelman Trust Barometer, an annual study...
Brazil takes an Austrian turn
The new Brazilian government’s czar for economic affairs is bringing in the right people, straight from the Austrian School, says Silvio Simonetti in this week’s Acton Commentary. Presidents and prime ministers often resort to the appointment of “czars” to handle a crisis or plex policies when a show of urgent political engagement seems in order. But these modern day czars, unlike their autocratic namesakes, are often short termers with greatly constrained powers and, by the very nature of plex problem...
Solving Africa’s state-society gap
The advent of 2019 has many wondering what kind of world will emerge in the next many years. Predictions of disruptive, technological change, and the transfer of geopolitical power abound. A recent report by the Hoover Institute specifically analyzes what kind of political, economic, and technological trends will form on the continent of Africa, given the shifting sands of our times. One portion of the report pays particular attention to African governance. Given that governance is a key ingredient to...
What you need to know about Elizabeth Warren’s wealth tax
On Thursday, Senator Elizabeth Warren announced on Twitter that she will institute a wealth tax if she is elected president in 2020. Here are the facts you need to know: Warren tweeted her plan on Thursday afternoon. We need structural change. That’s why I’m proposing something brand new – an annual tax on the wealth of the richest Americans. I’m calling it the “Ultra-Millionaire Tax” & it applies to that tippy top 0.1% – those with a net worth of...
Venezuelans march for freedom
In 1982, Venezuela was the richest major economy in Latin America. Now, it’s the most dangerous country in the world, behind Afghanistan and war torn South Sudan. This is socialism. Venezuela’s downturn is the result of decades of political upheaval and implementation of socialist policies from Hugo Chavez and now to Nicolas Maduro. Today, Venezuelans are taking to the streets to march in what many think will be the largest anti-government demonstration that has taken place in the past few...
Is your child wealthier than half the world’s population?
CNN: “The top 26 billionaires own $1.4 trillion — as much as 3.8 billion other people” Time magazine: “The World’s Top 26 Billionaires Now Own as Much as the Poorest 3.8 Billion, Says Oxfam” The Guardian: “World’s 26 richest people own as much as poorest 50%, says Oxfam” You’ve probably seen these headlines—or ones like them—in articles about economic inequality. You might have even assumed the claim must be somewhat revealing about global inequality. But it isn’t. In reality, such...
Radio Free Acton: The life of Francis Schaeffer; Netflix’s ‘Watership Down’
On this episode of Radio Free Acton, Caroline Roberts speaks with Stephen Nichols, the president of Reformation Bible College, about the life and work of Francis Schaeffer, 20th century protestant evangelist. After that, host Bruce Edward Walker talks about Netflix’s new series, “Watership Down,” with John Ehrett, writer, attorney and editor at the Conciliar Post. Check out these additional resources on this week’s podcast topics: Buy “Schaeffer: On the Christian Life by William Edgar” Learn more about Schaeffer’s contribution to...
Why the media lynched the Covington kids (and why they’ll do it again)
No one following the news could have missed the media’s misguided hysteria over students from Covington Catholic High School allegedly surrounding and taunting an American Indian activist. However, not only was the erroneous feeding frenzy – which included incitement to violence against minors – predictable, but its repetition is inevitable. On Saturday, a story went viral that the previous day the Covington kids, wearing MAGA hats, had left the March for Life only to barge into the Indigenous People’s March...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved