It would seem that neuroeconomics, as Cassidy understands it, straightforwardly threatens the liberal presumption in favor of liberty, providing a basis for both paternalistic social policy and regulatory intervention in the economy with one fell brain scan. Cassidy is not putting an exotic spin on the new research, but is simply following the lead of some of the emerging field’s most important thinkers, such as economists George Loewenstein, Colin Camerer, and David Laibson — all quoted heavily in Cassidy’s article, and all proponents of psychology and neuroscience‐based paternalistic policy.
The mundane observation that people sometimes let their emotions get the best of them is certainly more exciting when illustrated by colorful pictures of brain activity. But can brain scan evidence about how exactly the brain generates behavior in different scenarios really have such profound implications for politics and policy? Probably not.
Cassidy’s passage above helps illustrate the trouble with one brand of neuroeconomics. The orthodox formal theory of economic rationality has been understood traditionally to provide both a descriptive theory of human behavior and a prescriptive standard for evaluating it. Behavioral economics, including neuroeconomics, shows that the economist’s theory of rational choice is empirically false — a descriptive failure. Where behavioral economics goes wrong, when it goes wrong, is to retain the empirically falsified theory as nevertheless stating a binding ideal of rationality in light of which we can and should evaluate behavior. We don’t, in fact, behave like homo economicus, but we should. As Cassidy shows, it’s a short step to the thought that maybe the government should deploy policy to try to fix our failure to act rationally in the economists’ sense.
The problem is made clearer once you understand that the formal model of choice laid out in microeconomics texts involves some truly wild idealizations of human cognitive capacities. For example, the economists’ standard model stipulates that each person has a well‐defined and consistent ordering of preferences over all possible states of affairs (of which there are many), knows exactly what every other person believes and prefers, processes new information instantaneously and without error, and more. The assumptions of the standard theory are not simply psychologically implausible, but probably physically impossible, requiring either periods of deliberation longer than the age of the Universe, or computation faster than the speed of light.
It cannot be surprising, then, that real human subjects with exceedingly limited information and soggy brains that compute slower than a spam‐clogged Dell fail to live up to the standards of the formal theory of economic rationality. It would amount to a literal miracle if we did not so fail.
But then why are we concerned at all with a formal theory of rationality, which, after all, applies only to a physically impossible mathematical fiction? Why would we measure ourselves against that standard? Angels, the theologians tell us, are weightless, but those of us bound by gravity are not therefore obese. We can’t be rationally required or obligated to do something impossible. ‘Ought’ implies ‘can’, as the philosophers say. To find that real humans are “irrational” relative to an impossible standard is simply to find that that standard doesn’t apply to us — that the standard of rationality that does apply to us is different. We can only be required to do the best we can do; failing to do the impossible is no real failure at all.
Neuroscience is a category‐buster, helping us understand that there is often nothing in the brain that answers to our pre‐theoretical taxonomy of the mind. Peering into the brain, it becomes relatively clear that mental categories like ‘belief’, ‘desire’, ‘emotion’, ‘pleasure’, or ‘pain’ do not correspond one‐to‐one with well‐defined, unified, underlying brain mechanisms. Perhaps most significantly — and this requires a lot of intellectual adjustment — there is nothing in brain that looks much like the kind of Reason with a capital ‘R’ that Plato or Kant would recognize and celebrate. The more one appreciates the complex, often unintuitive organization of the brain, the more it becomes apparent that the norms of strict rationality embodied in mathematics, logic, decision theory, game theory, probability theory, and statistics are not internal to the mind, but are remarkably recent, and remarkably precious, cultural achievements.
Capital ‘R’ Rationality is to the mind as ballet is to the body. Through rigorous, disciplined training over years, it is possible to co‐opt the evolved nature of the mind to perform amazing feats of Reason, just as it is possible to co‐opt the evolved nature of the body to perform breathtaking feats of balletic beauty. But the untrained mind, which depends on lots of quick and dirty cognitive shortcuts that fall short of strict capital ‘R’ standards, was evidently good enough to get us up to the Renaissance and Enlightenment, when the cultural disciplines of Reason helped us ramp up to cultural and economic modernity. And, even then, the growth of science and the extended market order has not required that all citizens become fully vested in the norms of Reason. We can’t all dance Swan Lake, but we also almost never fall down the stairs.
Cassidy’s article flirts with an empirically credible notion of rationality when he discusses the work of neuroscientist Paul Glimcher, who writes, with his co‐authors Michael C. Dorris and Hannah M. Bayer, “There is, for example, no evidence that there is an emotional system, per se, and a rational system, per se, for decision making at the neurobiological level.” And that’s right. Glimcher’s pioneering approach assumes that computational resources are scarce, and that the brain must allocate them according to the expected payoff to the organism. In some contexts of choice, the expensive computational processes of the deliberative pre‐frontal cortex come online. In others, the brain defaults to more frugal processes involving quick “gut” judgment.
Glimcher’s approach doesn’t attempt to integrate economics and neuroscience by simply comparing (and judging) actual human behavior against the rarefied standards of economic theory, tempting the conclusion that individual behavior and market outcomes can be “improved upon.” Instead, it applies economic theory to the way the brain itself allocates its scarce resources, which helps explains why real behavior — and embodied, ecologically embedded rationality — cannot correspond to a (therefore inapplicable) standard of rationality that assumes an unbounded budget of cognitive resources.
Unfortunately, Cassidy brings up Glimcher’s work only to allow the economist George Loewenstein to airily dismiss it. Cassidy incorrectly writes that Glimcher’s work “might undermine a lot of neuroeconomics,” when in fact Glimcher’s work integrates economic theory and neuroscience at the most promising level. It is neuroeconomics. (Glimcher’s groundbreaking book Decisions, Uncertainty, and the Brain is subtitled The Science of Neuroeconomics.) The point is not to understand how real behavior is anomalous relative to economic theory, but to use economic theory to help us understand real behavior by illuminating the economizing functions of the brain. But missing this point allows Cassidy to preserve his story’s strained “reason‐versus‐passion” narrative frame, and all the tantalizing policy implications that fall out of it.
If good neuroscience does not in fact recognize a clear distinction between reason and emotion at the physical level, then it cannot be the case that neuroeconomics really implies that, as Cassidy writes, “[i]f emotional responses often trump reason, there can be no presumption that people act in their own best interest.” At best, neuroeconomics shows that peoples’ representation of their best interest shifts from one decision context to the next as the brain shifts its resources from one brain region to another. Neither neuroscience nor economics speaks to which representation of our interest is the right one. That would be a substantive value judgment that goes well beyond science.
However, Cassidy’s account of neuroeconomics makes it seem as though science does reveals that decisions made when in “hot” emotional states — when the limbic system is fired up — threaten to lead us rationally astray, while only decisions made in “cool” deliberative states represent our true “best interests.” But there can be no principled basis for privileging our “cool” desires over our “hot” ones without an independent conception our best interests, and that conception is emphatically not the formal theory of economic rationality. Even in terms of economic theory, there is no principled reason to systematically weigh long‐term preferences more heavily than short‐term preferences, as economist Glen Whitman has argued in a paper, “Against the New Paternalism: Internalities and the Economics of Self‐Control.”
It is no doubt safe to say that we shouldn’t act impulsively too often. But we shouldn’t override impulse too often, either. There are perfectly good grounds for loosening up with a few drinks, or blowing a paycheck in Vegas. Somewhere in the space between androids and orangutans there are human beings. But that isn’t to say that there is one correct way to balance impulse and deliberation. There are many kinds of good lives, and different forms of life strike a different balance between “hot” and “cool” decision‐making. As Aristotle notes, we should all eat neither too much nor too little. But too much for you might be just right for Milo, the champion wrestler.
That’s why “asymmetric paternalism” — Camerer and Loewenstein’s name for the “new political philosophy based on the idea of saving people from the vagaries of their limbic regions” mentioned at the start — isn’t really a special, unobjectionable kind of paternalism at all. It’s just paternalism, plain and simple.
Judgments about whether it is worth “saving people from their limbic regions” are no less morally loaded than judgments about whether it is worth saving people from their own sins. If the formal theory of economic rationality is impossible, and therefore cannot provide a binding standard of rationality for real people, it follows that deviations from that standard are not necessarily mistakes. Further, following Glimcher, there is no clear, neuroscientifically‐grounded notion of rationality, either. Adherence to the cultural norms of Reason — much like adherence to the norms of ballet — requires disciplined training in the coordination of capacities not “built” to be coordinated in that way. Whether a decision counts as a “mistake” or not depends on contestable value judgments about the norms of reason and the aims of a good life. There may be excellent arguments for such judgments, but those will be arguments about what kind of people we should aspire to be, not arguments about economic rationality or neuroscience.
If you substitute “moral” and “morality” for “rational” and “rationality” in the passage from Cassidy’s essay below, you’ll see the problem more clearly.