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 7, 2026 6:24 AM

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 hurricanes
Hurricane Florence has struck the Carolinas, dumping massive amounts of rain that could trigger catastrophic floods inland. Here are five facts you should know about these types of deadly storms: 1. A hurricane is a form of tropical storm that form over warm ocean waters in the eastern Pacific Ocean, Caribbean Sea, southern Atlantic Ocean, and Gulf of Mexico. When the winds of a tropical storm are less than 38 mph, it is called a tropical depression, and when the...
A Jewish perspective on market, justice, and charity
“Not a day goes by when there’s not some concern raised about the state of the economy and how people are faring,” says Curt Biren in this week’s Acton Commentary. “While recent economic growth has been promising, wage growth is lackluster, many say.” The middle class is shrinking. There’s too much e inequality, and the list goes on. These concerns are pelling. Who wouldn’t like to see more opportunity and more growth? People yearn for the good life, to experience...
Rev. Robert Sirico’s ‘Catholique et Libéral’ launched in Paris
The full-house at Paris Story theater brought together many ranks of French leadership from economics think tanks, businesses, human rights advocacies, and the Catholic Church. From left to right: David Briend (publisher), Rev. Robert Sirico (author), Emmanuelle Gave (interpreter), Jean-Philippe Delsol (IREF president), Charles Gave (preface author and president of Institut des Libertés) Recently, on September 6, Acton’s president and co-founder Rev. Robert Sirico launched his first trade press book in French Catholique et Libéral. Les raisons morales d’une économie...
Abp Justin Welby compared Amazon to leeches — but it built his church
In a recent speech, the Archbishop of Canterbury likened Amazon executives to leeches and ancient Aztec rulers who “ate the flesh of human sacrifices.” However, in reality Amazon has generated such prosperity for its shareholder, the Church of England, that it has financially built up the body of Christ. In a harsh address to the Trades Union Congress last week, Welby said that Amazon “leached off the taxpayer,” since its low tax bill proves “they don’t pay for our defence,...
Post-industrial economics: Studying human action in an age of intangibles
As pletes its transition into the Age of Information, economists are struggling to identify the drivers and develop their predictive models accordingly. Alas, as businesses continue to grow and evolve more rapidly, and as the corresponding systems continue to increase plexity, many economists still view individuals and businesses as mostly static and reactionary. “Mainstream economists treat the firm as if it were an inorganic particle that does nothing but react to forces around it,” writes economist Arnold Kling in National...
Stiglitz vs. Easterly: Leading economists debate the role of markets in reducing poverty
In a fascinating debate hosted by Reason Magazine, development economists William Easterly and Joseph Stiglitz discuss how to best fight global poverty, responding to a simple question: “Which is a better approach, freer markets or increased government action?” Easterly, a professor at New York University and author of the popular book, The White Man’s Burden, highlights the importance of freer markets, arguing they provide better incentives, better mechanisms for sharing knowledge, and, most importantly, better rights. Stiglitz, a Nobel laureate...
A crash course on how to interpret the U.S. Constitution
Today is Constitution Day, a holiday celebrated in America every year on September 17, the anniversary of the day the framers signed the document. The U.S. Constitution is arguably one of the most important legal documents in the history of the world. Because of this venerated status, though, many people assume that you need to be a Juris Doctor (J.D.) and an expert on recondite Constitutional law to understand how to read the document, much less interpret the Constitution. But...
Radio Free Acton: Inside the studio of a violin maker; Upstream on the film ‘Andrei Rublev’
On this episode of Radio Free Acton, award winning news anchor Anne Marie Schieber visits the studio of Matthew Noykos, a violin maker in Grand Rapids, MI, to learn more about his craft and discuss how he finds purpose and fulfillment in his everyday work. Then, on the Upstream segment, Bruce Edward Walker speaks with Robert Bird, author of two books on Russian filmmaker Andrei Tarkovsky, about Tarkovsky’s film “Andrei Rublev,” which was recently re-issued by The Criterion Collection. Check...
How Trump’s tariffs hurt Michigan industry
“President Donald Trump’s continued embrace of tariffs spells danger for Michigan,” says Tyler Groenendal in an op-ed for the Detroit Times. Groenendal, the foundation relations coordinator at the Acton Institute, says though Trump is noted for his “America First” refrain, his call for tariffs will ultimately hurt America the most: Michigan is particularly vulnerable to the consequences of protectionism. According to estimates by the U.S. Census Bureau of Economic Analysis, imports and exports accounted for 38.9 percent of the Michigan’s...
How expert are expert stock pickers?
Note: This is post #93 in a weekly video series on basic economics. In his 1973 book, A Random Walk Down Wall Street, economist Burton Malkiel made a controversial claim: a blindfolded monkey, throwing darts at the financial pages, could select a basket of stocks that would do just as well as a set chosen by the pros. Economist Alex Tabarrok explains why that is true and why the first rule of smart investing is “ignore the expert stock pickers.”...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved