Wednesday, January 11, 2012

Behavioral Economics...really just the same old stuff

Philip Mirowski (fun to read critic of neoclassical economics, though I find Steve Keen's analysis to be far more penetrating) has written a critique of Behavioral Economics.

I think there may be some cherry picking (or actually, lemon picking) here.

But I'm much more inclined to see myself as an "Alternative [amateur] Economist" now, rather than a Behavioralist, and now I have little faith that the Behavioral approach will lead us from the chasm.

BTW, the highly reductionist school of Psychology pioneered by BF Skinner, but never really going far and discredited in its largest ambitions shortly after it started, is known as "Behaviorism" not "Behavioralist."  But they seem to share a similar fault of being far too shallow in deep waters.  Shortly after the birth of Behaviorism a competitive school of Psychology called Cognitive Psychology displaced it.  Cognitive Psychology does not dismiss the idea that there is stuff going on "in there" that can be thought about and tested experimentally, if not as obviously (and uselessly in many cases) as with Behaviorism.

I myself was "trained" (I got a BA) in Cognitive Psychology in the late 1970's, and as I understand it the Cognitive school still rules Psychology.

So, Cognitive Economics?

Actually, I tend to favor real Keynesian economics (which doesn't bother with assumptions about individual behavior anyway) and the Institutional Economics of John K. Galbraith, and I recently got one of Minsky's books.  But my main heavy reading now is Steve Keen's Debunking Economics (along with Free Fall by Stiglitz).

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