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 26, 2026 4:46 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
Acton Line podcast: A primer on religious liberty (rebroadcast)
This week we’re rebroadcasting a conversation about religious liberty with Ryan T. Anderson, the William E. Simon senior research fellow at the Heritage Foundation, that was first released on the podcast in April of 2015. In the intervening five years since we first aired this episode, much has changed in our conversations on religious liberty – but much is still the same. While the focus is no longer on Indiana’s Religious Freedom Restoration Act as it was in 2015, religious...
Following the crowd: Rene Girard on the denial of Peter
This week, June 29, was the solemn feast of Saints Peter and Paul. The Apostle Peter is remembered for many things: his declaration of Jesus as the Messiah; his boasting of fidelity, followed by his threefold denial of Christ; and his subsequent repentance and heroic martyrdom The late French anthropologist and former Stanford professor Rene Girard has an insightful discussion about the denial of Peter and the problem of scapegoating and contagion. He sees in it an archetype of the...
We are rational animals, not racial animals
The problem with bad ideas is that they never remain merely ideas. Once they attract sufficient – not always majority – support, bad ideas e codified into worse laws, which afflict whole societies. We are witnessing that process now over a misguided notion of how important “race,” ethnicity, and other identifiable factors are to the value of the human person. Consider the answer of science and Western civilization to what makes us uniquely human. The noblest part of a creature...
Michael Matheson Miller to Patrick Deneen: Strong towns need strong economies
Among the most influential critics of the free market on the Right is Patrick Deneen, a political science professor at the University of Notre Dame. Acton Institute Senior Research Fellow Michael Matheson Miller has published a response in Law & Liberty to Deneen’s recent plea for a national policy to favor munities (“Thinking Big to Act Small” in the American Compass). Miller writes that he shares Deneen’s belief in decentralization, the problems of individualism, the shallow nature of consumerism, and...
Rand Paul on the fatal conceits of COVID-19 central planning
When the first wave of COVID-19 hit the United States, Americans were generally sympathetic to the various lockdowns. Yes, we were likely to endure significant economic pain, but given how little we knew about the virus and how great the risks could be, we were willing to accept the cost. Now, after months of mismanaged responses, contradictory analyses, and flip-flopping guidance from our esteemed sources, trust in our leaders and institutions is wearing thin. Despite all that we have learned,...
Evolving between two worlds
In the latest issue of The New Yorker Larissa MacFarquhar has a deeply researched and beautifully written story, “How Prosperity Transformed the Falklands.” It chronicles the history of the Falkland Islands from the early settlement of the then-uninhabited islands to the Falklands War between Argentina and the United Kingdom in 1982, as well as the economic transformation after that conflict. It is an economic success story but also a meditation on what makes munity and nation and how rapid economic...
How to drain the poison of outrage out of social media
It is a universally acknowledged truth that there are deep-seated problems with social media. Academics have written books against it; once venerable institutions are being torn asunder by it; individuals are being demonized on it; and all the while, we are spending more and more of our lives on it. Social media firms are keenly aware of the problem and are trying, in ham-fisted and halfhearted ways, to address it. Venkatesh Roa, founder and editor-in-chief of the blog ribbonfarm, gives...
Espinoza v. Montana: A victory for school choice – but for how long?
The U.S. Supreme Court’s decision in Espinoza v. Montana Department of Revenue admirably defended religious liberty, school choice, and parental rights. However, the court may have also paved the way for teachers unions and hostile politicians to undermine that victory. On June 30, the Supreme Court ruled 5-4 that excluding religious schools from a privately-funded, state-established scholarship program is an “infringement on free exercise” of religion and is “fatally underinclusive” by denying benefits to people of faith. “Discrimination against religious...
Acton Line podcast: Are we in a revolutionary moment?
Since late May, many parts of the United States have grappled with unrest. Anger over George Floyd’s death sparked protests, with looting and violent riots breaking out, as well. Protesters have also been defacing and tearing down statues across the country, including statues of Confederate leaders, as well as monuments to George Washington, Ulysses S. Grant, and even abolitionists. The Capitol Hill Autonomous Zone (CHAZ), also dubbed the Capitol Hill Organized Protest (CHOP), was a six-block area in Seattle where...
Eroding judicial activism (more than) one nation at a time
Judicial activism is a transatlantic problem. Thus, it requires a transatlantic analysis. The Acton Institute has helped link English-speaking citizens concerned with preserving the Constitution in a conversation with the world’s 270 million Francophones. Last month, the U.S. Supreme Court ruled that the 1964 Civil Rights Act included sexual orientation and gender identity, paving the way for new rounds of lawsuits and potentially rendering it impossible for some employers to operate their businesses in accordance with their faith. The justices’...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved