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 19, 2026 2:28 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
‘Democratic socialist’ policies made the poor poorer: Study
Christians who oppose government intervention are often accused of harboring indifference, or antipathy, for the poor. But an abundance of evidence from two continents shows that welfare state policies actually reduce the wealth of the poor and raise prices, while benefiting the upper-middle class and well-connected corporations at taxpayers’ expense. A report from the European Central Bank analyzed 13 European nations and found that the higher the level of social welfare programs – the sort of entitlements many equate with...
The uneasy conscience of fair trade fundamentalism
In The Christian Century, Rev. David Mesenbring provides an accounting of his experiences with fair trade. Mesenbring, who was an early advocate and adopter of fair trade practices and policies, thinks there’s good reason to doubt the efficacy of the movement as currently stands. I was an early adopter of fair trade. Prior exposure to rural poverty in Africa had sensitized me to the plight of farmers in the global economy. Searching for a fair trade logo on my purchases...
Samuel Gregg: Charles de Gaulle could have prevented the Brexit debate
The integration of Europe in the postwar era continues to roil politics continent-wide, most notably taking center stage in this week’s UK general election. Yet Acton Institute Director of Research Samuel Gregg writes that Charles de Gaulle could have spared Europe this future. Gregg traces the history of European supranationalism from Immanuel Kant to Jacques Maritain’s Christian Democratic ideas in a new essay posted today at Law & Liberty. De Gaulle, although far from an isolationist, understood the reality of...
Three developments or reversals of Church doctrine?
“The Church changed its teaching on usury.” If I had ten cents for every time I have heard this, by now I might have enough to buy myself lunch – and more! However, if I had been collecting interest on that money, would I have earned enough to make me immoral? It seems to be a hard pill to swallow either way: is the classical teaching on usury wrong, or is the modern banking system wrong? It might be a...
Worthwhile listening: Vladimir Putin, school choice, and Michael Card
As you relax or workout this week, you can take Acton’s issues – and even some of the people of Acton – with you. Two podcasts, produced on different sides of the Atlantic, would make ideal listening. Podcast 1: The BBC discusses U.S. school choice On Thursday, the BBC World Service program Outlook reported on the inspiring life story of Virginia Walden Ford in a segment titled, “A mother’s battle for her son’s education.” Ford is the subject of the...
Catholic social teaching is for all of life
Senator Marco Rubio’s interest in Catholic social teaching is exciting even if confused in its economic analysis and public policy mendations. On the Acton Line Podcast released today I discuss with Fr. Robert Sirico the promise and peril of politicians looking to Catholic social teaching for guidance. The promise is in grounding questions of politics in the true nature of the human person and society while the peril is in reducing Catholic social teaching to a mere set of public...
Acton Line podcast: Rev. Robert Sirico responds to Marco Rubio’s ‘common good capitalism’
Sen. Marco Rubio’s recent proposals for mon good capitalism’ have sparked much criticism and praise. Rubio draws heavily from Catholic Social Teaching in his defense mon good capitalism, describing an ideal economy for mon good characterized by dignified work and stability for working families. On November 5, Rubio addressed students at the Catholic University of America, saying “[c]ommon good capitalism is about a vibrant and growing free market, but it is also about harnessing and channeling that growth for the...
Chilling video captures the moment socialism morphs into anti-Semitism
“Anti-Semitism,” quipped nineteenth-century German socialist August Bebel, “is the socialism of fools.” However, a chilling new video shows that socialism helps prime leftists to espouse anti-Jewish sentiments in an instant. The UK’s Labour Party in general, and party leader Jeremy Corbyn in particular, have long been accused of being indifferent to, or vaguely supportive of, anti-Semitism. “A new poison – sanctioned from the very top – has taken root in the Labour Party,” wrote the apolitical Chief Rabbi of the...
Vocation isn’t about ‘doing what you love’
We’ve seen a renewed focus among Christians on the deeper value and significance of our work, leading to plenty of fruitful reflection on how we might find and follow God in our economic lives. Yet this same realization has coincided with a growing cultural emphasis on self-actualization and the supposed glories of “doing what you love and loving what you do.” While we may be growing more attentive to the power of “vocation,” we’ve also begun to confuse and conflate...
The road to London Bridge is paved with self-loathing
The day after Thanksgiving, the world saw a murderous terrorist prevented from maximizing his death toll by desperate people armed with nothing more than personal courage, a narwhal tusk, and a fire extinguisher. As I write at The Stream, unless the West jettisons its paralyzing doubt of itself and its historic faith, that scene threatens to e an “epoch-defining event.” Naively believing that all religions are alike, and that Western capitalism is uniquely exploitative, renders European culture incapable of understanding...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved