Further to the decision of the Nobel committee to give Richard Thaler this year’s prize for economics (about which I bloggeda few days ago), Frank Pasquale pointed me to an interesting critique by Juan Pablo Pardo-Guerra, who picks out “three problems in economics and its relation to the ‘real world’ it inhabits”.
Firstly, it skates over the fact that what Thaler is being rewarded for — realising “that people can be influenced by (mostly social) prompts to alter their behavior” — was, well, rather old-hat in other social science disciplines. So the Swedish recognition of behavioural economics is really just “a legitimation of economic imperialism: a finding is only truly relevant if published by an economist (corollary: being an economist from Chicago helps).” Ouch!
Secondly, though Thaler’s contribution might make economics “more human—and real”, the behavioural turn “doesn’t make away with the ontological commitments of discipline, privileging market processes and individual action as the fundamental sources of virtue.” Take the metaphor of the ‘nudge’, as articulated by Thaler and Sunstein. “Rather than questioning the economics of general equilibrium”, says Pardo-Guerra, “‘nudging’ is a proposal in calculated engineering: we can build policies that create outcomes similar to those of theory by gently walking slightly irrational, bounded economic agents through the correct ‘architectures of choice’”. But who conceptualises those architectures? And within what ideological constraints?
And finally, this year’s prize confirms that to win a Nobel prize in economics, it really helps to be male and white. To date, only one woman — Elinor Ostrom — has been recognised, and Amaryta Sen is the only non-white laureate so far. I don’t know much about the overall demographics of the economics discipline, but if the Nobel list is representative then one can see why it might be more problematic than the Swedes recognise.