Economists like facts, facts with numbers. And they like to link those facts with human behavior, specifically choices we make about spending, saving and investing.
For many years, they had a favorite theory of motivation. As Robert J. Shiller put it recently: “people are rational, and thus . . . systematically maximize their own happiness, or . . . their ‘utility.’” Increasingly, that theory had been called into question by the “anomalies” of human economic behavior that a new breed of “behavioral economists” have called attention to, specific ways in which we do not act in our own self interest. They have opened up the field to a more complex and realistic view of motivation that psychologists and psychoanalysts have shared for years.
More recently, some economists have been pursuing the hope of finding hard evidence in the brain to account for our economic behavior. Now that the brain can be studied directly through neuro-imaging, there might be real facts to uncover, not just collections of behavioral mechanisms or theories or statistical correlations.
Shiller, a Nobel laureate in Economics, recently sought to assess those efforts in a review of a new book by Robert Glimcher, Foundations of Neuroeconomic Analysis. The review is respectful but cautious. He refers to the “neuroeconomic revolution,” suggesting a major shift in the making, one that will be “disturbing” to most of his colleagues. He notes that Glimcher, who has an appointment in the Economics department at N.Y.U., has uncovered “tantalizing evidence.” His agenda is “to transform ‘soft’ utility theory into ‘hard’ utility theory by discovering the brain mechanisms that underlie it.”
That suggests he is less committed to discovering new ideas than confirming old orthodoxies. “Glimcher . . . is seeking a physical basis for [prevailing economic theory] in the brain,” Shiller notes. But what concerns him most is that Glimcher and his colleagues “have yet to find most of the fundamental brain structures.”
At the very end of his review, the gloves come off: “Maybe that is because such structures simply do not exist, and the whole utility-maximization theory is wrong, or at least in need of fundamental revision. If so, that finding alone would shake economics to its foundations.”
That would not bother Shiller too much, I suspect, as he is already convinced that the “utility maximization theory” is wrong. (See, “<a href="http://www.project-syndicate.org/commentary/the-neuroeconomics-revolution">The Neuro-Economics Revolution.</a>”)
But as a psychologist two things worry me more about the neuro-economics project. One thing is that Glimcher and his colleagues do not appear to be looking for newer and better ideas, just confirmation of what they already “know.” As a result, they may persuade themselves that they have found it, and, in the long run, that would set back the whole project.
The other concern is that they are barking up the wrong tree. The brain is adaptive, flexible, plastic. It is not governed by logic or, even, fixed ideas. It is built up by experience over time, and if there are invariant structures they are as likely to be impediments to our evolutionary survival rather than aids to discovering reality.