Economists and the ‘As If’ Argument

Really nice post from “Unlearning Economics”.  We should model our ideas of economics on the behavior of real humans, not ideal economically-rational automatons:

Economists and the ‘As If’ Argument.

I would add that, most of the time, when natural intelligence violates the assumptions of artificial intelligence, natural intelligence WINS.

That is to say, we are like this most often because we actually work better than the naive theory in the AI.  Evolution will do that for you.

Which means that, even if we could coerce/train people to behave with more “economic rationality”, it probably wouldn’t  be a good idea. Some of the most economically interesting developments of our time — free software development, free culture, open hardware, crowd-funding — operate precisely because people routinely violate naively-rational economic thought (but in context, operating in a system with other economically-irrational humans, these behaviors turn out to actually yield rational / optimal results).

Advertisements

About Terry Hancock

Terry Hancock is the producer and director of "Lunatics" ( http://lunatics.tv ). He is also a regular columnist for Free Software Magazine ( http://www.freesoftwaremagazine.com/articles_by/5 ), and a lifelong advocate for space, science, and technology. More at http://terryhancock.narya.net
This entry was posted in Free Culture, Opinion and tagged , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s