Wednesday, November 23, 2005

Why do they hate us

Sooner or later, any student of economics starts to wonder why the profession is so deeply reviled, and why comments perfectly acceptable within the classroom are verboten outside of it. Certainly I know of no other social science that gets hate mail with the venom that the poor old rational, forward looking utility maximizer does.

I think Arnold nails it here:
We need our type M [empathetic] brains, but in moderation. Without a type M brain, one is socially underdeveloped. In extreme cases, someone with a weak type M brain will be described by Asperger's Syndrome or autism. On the other hand, as Bloom suggests, there are many cases in which we over-use our type M brains. For example, social psychologists have long noted the fundamental attribution error, in which we see people's actions as derived from their motives or dispositions when in fact the actions result from context.

Economics is an attempt to use a type C [analytic] brain to understand market processes in impersonal terms. We do not assess one person's motives as better than another's. We assume that everyone is out for their own gain, and we try to predict what will happen when people trade on that basis.
There is no surer way to upset people than assume *everyone* (not just Republicans) is out for their own gain and then think systematically about the outcomes.


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