Further to Andrew Ferguson on Behavioral Economics

Todd’s right, Andy Ferguson’s Weekly Standard piece is excellent – whether one agrees with his ultimate take on it or not.  The bottom line of the piece, however, is not simply a skepticism about the powers of social science – behavioral economics as the New Social Engineering.  It is, rather, a broadly libertarian point, going to a crucial apparently methodological, but ultimately moral, difference between traditional economics and behavioral economics:

You can see how useful the notion of irrational man is to a would-be regulator. It is less helpful to the rest of us, because it runs counter to every intuition a person has about himself. Nobody sees himself always as a boob, constantly misunderstanding his place in the world and the effect he has upon it. Surely the behavioral economists don’t see themselves that way. Only rational people can police the irrationality of others according to the principles of an advanced scientific discipline. If the behavioralists were boobs too, their entire edifice would collapse from its own contradictions. Somebody’s got to be smart enough to see how silly the rest of us are.

Traditional economics has always been more modest. Assuming the rationality of man was a device that made the discipline possible. The alternative—irrational people behaving in irrational ways—would complicate the world beyond the possibility of understanding. But the modesty wasn’t just epistemological. It was also a democratic impulse, a sign of neighborly deference. A regulator who always assumed that man was other than rational was inviting himself into a position where he could exert a control over his fellow citizens that wasn’t proper for a true democrat. Self-government demands this deference. It won’t work otherwise.

“Ultimately,” the economist Brian Mannix wrote not long ago, “we insist that our regulators start from a presumption of rationality for the same reason that we insist that our criminal courts start from a presumption of innocence: not because the assumption is necessarily true, but because a government that proceeds from the opposite assumption is inevitably tyrannical.”

Long before reading Cass Sunstein as a risk-expert, I read him as a jurisprudential philosophe.  I mean, going back to his writing on “deliberative democracy,” going way back.  It seems to me that the move from traditional economics here to behavioral economics is precisely the same move in moral philosophy that he, and others of the same tendency, made in the deliberative democracy literature.  What was it, after all, that characterized “deliberative democracy” as an intellectual move, in the hands of Amy Gutmann, Sunstein, and others?  A theory of meta-deliberation, a theory of how people would ideally discuss all the deeply divisive issues of the day – abortion, affirmative action, on and on.

And yet somehow, some way, the conclusion was always that the right process of thinking must ineluctably lead one to think they way Gutmann, Sunstein, all good and  honorable liberal thinkers thought about these hot button issues.  Not just good people – but rational people -would all think affirmative action a good thing, abortion okay, etc., etc.  The most stunning intellectual move was not merely the claim that these were the right moral conclusions, but that to reach some other conclusion meant that you hadn’t deliberated enough, or deliberated in the right way.

It is the same move that Ferguson’s article describes because it presumes to know what you don’t – viz., the set of rational outcomes.  As an exercise in paternalism, it reminds me of conversations as a child with my mother – viz., it wasn’t a conversation in which we had come to reason together to conclusions that we each might reach, even to agree to disagree.  No, the conversation wasn’t over until I had come to agree with her.  That’s deliberative democracy in a nutshell – and Ferguson describes the same move recapitulated as social science, in the form of behavioral economics.