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 10, 2026 5:32 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
Solovyov on economic morality
Vladimir Solovyov Towards the end of his life, the 19th century Russian philosopher Vladimir Solovyov published his “On the Justification of the Good: An Essay on Moral Philosophy” (1897). In this book, wrote historian Paul Valliere, Solovyov abandonded his vision of a “worldwide theocratic order” in favor of the more concrete demands of building a just society. With “Justification of the Good,” Solovyov (1853-1900) presented a general theory of economic and social welfare based on the idea that all human...
Red China struggles to go green
OSD’s Annual Report to Congress on the Military Power of the People’s Republic of China has some illuminating – and somewhat staggering – insight on the current state of affairs with respect to China’s environment and how it influences their national strategic policies. It’s a fascinating look at how the munist nation is dealing with the realities of ing a global superpower. Under the heading “Developments in China’s Grand Strategy, Security Strategy, and Military Strategy” the document includes this bullet:...
The call of workplace chaplaincy
Richard Baxter, the seventeenth-century Puritan identified by Max Weber as embodying the Protestant ethic of “worldly asceticism,” once called for chaplains to be sent into places of work for the conversion of sinners. In a 1682 treatise titled, How to Do Good to Many, Baxter pleads with “Merchants and Rich men” to provide for “some able zealous Chaplains to those Factories” situated in lands where the Gospel had not yet taken root. He urges chaplains “such as thirst for the...
Philadelphia’s tax mess calls for reform
When I lived in Philadelphia, Pa. as young boy, I always wondered why they called it the city of “Brotherly Love,” especially since some of the neighbors seemed so mean. The name “Philadelphia” is mentioned in Revelation 3:7. William Penn gave the city that name so as to serve as a reminder of the importance of religious liberty, peace, and an optimistic spirit. “We must give the liberty we seek,” said Penn. Some of my family roots hail from the...
Who said it?
Surely these are the words of a disciple of Hayek or Friedman, right? Under the guise of protecting us from ourselves, the right and the left are ing ever more aggressive in regulating behavior… …The real question for policy makers is how to protect those worthy borrowers who are struggling, without throwing out a system that works fine for the majority of its users (all of whom have freely chosen to use it). If the tub is more baby than...
Educational freedom under attack
As many PowerBlog readers will be aware, homeschooling is an educational choice that increasing numbers of parents are making. Once a fringe activity operating under the radar of the law, over the course of the last thirty years it has practically gone mainstream, being legalized de jure in most states and de facto in the others. No one has precise numbers (the government can’t track them!), but everyone agrees that the number of homeschooled children in the US has long...
Where do we go from here?
Matt Stone asks the question: What do you think are some of the challenges that remain for Christian environmental theology? I am presuming here that, if you’re the sort of Christian that likes a blog like mine, you’re not the sort of Christian who needs to have the dots joined between Christian ethics, creation care and environmental theology. But where do we go beyond the basic joining of the dots? How much more remains to be done… [snip] Personally I...
Debate: Should religion and politics mix?
Speaking of Chuck Colson, he’s participating in a debate sponsored by the Miller Center for Public Affairs at the University of Virginia tonight at 7:00 PM (Eastern). The proposed resolution is: “Religion should have no place in politics or government.” Arguing the affirmative are Rev. Barry Lynn, Executive Director of Americans United for Separation of Church and State and Jacques Berlinerblau, Associate Professor and Director of the Program for Jewish Civilization, Georgetown University. Taking the negative are Chuck Colson of...
Rome seminar on Populorum Progressio
Last week, I had the pleasure to attend one of the Acton Institute’s seminars here in Rome. Located at the campus of the Pontifical University of Regina Apostolorum, the seminar drew more than 100 religious and lay persons from all over the world. It was apparent that the topic was not only an interesting one, but also a personal one for many in the room. The presentations dealt with the papal encyclical Populorum Progressio forty years later. Asking the pertinent...
The Faith: We ask, Chuck answers
As part of our participation in the blog tour for Chuck Colson’s book The Faith, we got to submit a question for Chuck to answer. Here’s our exclusive Q&A: PowerBlog: You talk about the history of the faith and tradition in your book a great deal. What do North American evangelicals stand to gain from examining more closely their own history and traditions? In what sense ought Protestantism be understood as “catholic”? Part of that great Christian tradition has to...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved