A Mixture of Frailties (Part 2): How the Pendulum Swings

I'm reading Dr. Peter Ubel's new book, Free Market Madness: Why human nature is at odds with economics and why it matters. It is excellent. It does for behavioral economics what Malcolm Gladwell's book Blink did for other aspects of social psychology. Like any good book, my reading is generating a number of responses. The first are thoughts on the rationale vs. the irrational in psychological science.

Dr. Ubel, Peter if I may, is a good writer and one of those people who, even at a distance, is easy to admire. He knows a great deal, and he's able to communicate it clearly, integrating history, economics, psychology, medicine and just plain-old good story telling to make his point. I highly recommend his book (although I really don't like the cover design, Peter - Did marketing gurus do research to show that most people are more likely to choose a cover with that design? ☺ )

I'm going to write at least two blog entries in relation to my reading. This first one is focused on a big issue that is debated quite a bit here on the PT blogs, the very nature of human nature. The second entry will focus more on Chapter 7 of Peter's book, "Impulsive behavior and the battle between our current and future selves." It is this chapter in particular that speaks to some of my own interests in self-regulation failure and procrastination. Later, I'll have some comments on his policy recommendations and educational implications such as teaching children self control.

The story of irrational decisions
In Free Market Madness, Peter tells the story of how some extraordinary psychologists (Daniel Kahneman and Amos Tversky) along with an insightful economist (Dick Thaler) demonstrated that we, people, are not always rational decision makers. In fact, we fall prey to all sorts of fallacies, the details of which I won't get into. I'm sure Peter will be writing to these, and if you don't know them from your own studies of social psychology, you'll love this book.

Peter talks about the swing of a pendulum of sorts - from a position where at least some economic theories assume that we are always rational in our decision making, to a position away from this extreme. Through observations of life and very clever experiments, the protagonists in Peter's story clearly show that the brain works in "funny ways." There are unconscious processes that seem irrational that we need to take into account when we think about human decision-making.

So, this is a story about moving away from an extreme assumption - absolutely rational behavior. The thing is, at least some psychologists are now adopting the other extreme position that we never make truly rational, willful decisions. The pendulum is swinging, I think, to another untenable position.

There isn't anything new here in some regards, of course. Many theories have proposed both unconscious and conscious processes. A classic example is Freud. Yes, I, a modern research psychologist, said that name, Freud.

Freud's legacy
Drew Westen (Emory University) published a paper in Psychological Bulletin (1998) brilliantly summarizing Freud's scientific legacy with the aim of arguing for a psychodynamically informed psychological science. Of course, at the mention of Freud, many of us stop reading and thinking, right? His ideas were completely rejected by modern science, weren't they?

Well, Westen explains that many of Freud's ideas were off the mark, particularly the over-emphasis on sex, but a key legacy of Freud's work was the notion of the unconscious. And, while modern psychology has moved away from a "motivated" unconscious (that cauldron of seething libidinal energy) to more modern notions of a "cognitive" unconscious (the kind of effects we see when people are primed to think about things), the unconscious has been a key component of at least some psychological theories for a long time.

Free Market Madness is not an argument for a psychodynamically informed psychology and economics. Far from it. However, it is an argument for recognizing unconscious, irrational processes in our decision making.

The modern pendulum swing
The unconscious has lived as a neighbor to conscious processes in psychology for a long time. Observations of behavior, and lived experience itself, teaches us that both conscious and unconscious processes are at work in human motivation and action. Yes, our brain has been "wired" by the long process of natural selection to have some bias that seem to trick us and undermine us, as Peter explains in some detail using examples such as saving for retirement or dieting. We have all learned that our brains can trick us. For example, we are prone to perceptual illusions that we learned in first-year psychology, and most important to Peter's thesis, we are prone to decisional bias labeled as things like the availability heuristic or representativeness bias. There is no doubt that a good portion our thoughts and actions are unconscious as John Bargh argues.

Freudian Psychology Essential Reads

The Birth of Psychoanalysis, and the Erasure of a Life

Failed Resolutions and Broken Promises

At the same time, there is ample evidence from life and research labeled "Positive Psychology" that we, humans, make conscious choices. It's not only that we become aware consciously of choice (the strong position of those who dismiss will), but that we act willfully in ways that might be described as courageous, kind or even wise. Peter provides examples of these conscious, deliberate acts as well.

So, my first reaction to reading Free Market Madness is the "madness" of adopting an either-or position with regards to psychological processes - conscious or unconscious, but not both. Peter clearly recognizes how both processes are part of our psychology, and he advocates that this should inform public policy to help us achieve our goals. Individual self-regulation and willpower so often simply aren't enough.

I'm glad that Free Market Madness is contributing to our understanding of how irrational we can be, how the assumption of rationality in economics is problematic, and how we need to consider both the rational and irrational in humanity when we develop policy. What this book also reminded me is, as one of my early mentors once told me, "we borrow from each other's garbage pails." That is, one discipline borrows ideas from another, but these ideas have often already been discarded in the other discipline.

The assumption of rationality, of utility, as a dominant explanatory principle of human decision making, is one such idea. Free Market Madness does a good job of showing the limits of this assumption and the problems this mistaken belief can create.