Dosteovsky’s view of behavioral economics

Sitting in my political economy class yesterday I watched Roberto Unger and Ricardo Hausmann debate economics. Unger asserted, and Hausmann all but conceded, that economics does not respond to empirical evidence by throwing out its models for looking at the world. Instead, it blames the world for problems with the models, as in, ‘oh, the model was right, but there was a market failure. People didn’t do what they should.’

It reminded me of the satire on economic man in Dosteovsky’s Notes from Underground:

Though man has come to see more clearly than in barbarous times, he is still far from having grown accustomed to acting as reason and science dictate. But even so you are perfectly confident that he will not fail to grow accustomed once one or two old bad habits have passed and once common sense and science have thoroughly re-educated and given a normal direction to human nature. You are confident that man will then voluntarily cease making mistakes and…refuse to set his will at variance with his normal interests. [page 24, Pevear and Volokhonsky translation]

“…our wantings are for the most part mistaken owing to a mistaken view of our profit. We sometimes want pure rubbish precisely because, in our stupidity, we see this rubbish as the easiest path to the attainment of some preconceived profit. Well, but when it’s all explained, worked out on a piece of paper (which is quite possible because, after all, it’s vile and senseless to believe beforehand that there are certain laws of nature which man will never learn) — then , to be sure, there will be no more so-called desires. For if wanting someday gets completely in cahoots with reason, then essentially we shall be reasoning¬† and not wanting, because it really is impossible, for example, while preserving reason, to want senselessness and thus knowingly go against reason and wish yourself harm….And since all wantings and reasonings can indeed be calculated — because after all they will someday discover the laws of our so-called free will — then consequently, and joking aside, something like a little table can be arranged, so that we shall want according to this little table.” [ibid., pp. 26-27]

If I didn’t know that homo economicus was a 20th century creation, I would’ve thought Dosteovsky was writing about it.

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