fatvegan

I've noticed that the myths that economists like to debunk often look quite a lot like the heuristics that humans use to guide their daily life without spending all of it in front of a calculator. Humans have a lot of innate preferences for things (like equality) that economists try to convince humans are foolish or perverse. In the eternal search for the one true model, it is important to ask ourselves why we might make the choices we make. But it's also important to remember that most of the stuff in people is there for a reason. Economists have a terrifying respect for the success of evolution in getting us where we are, but a surprising disrespect for a lot of the intuitive preferences that are almost definitely a product of this evolution.

If your economic model tells you that equality isn't important and doesn't make you happy, but the people are saying they want it you have to decide if there is something humans are including in their preference model (i.e. experience/date from millions of years of evolution) that your model is missing out. I'm not saying that humans always work stuff out better and smarter than models. Sometimes we are made aware of significant inconsistencies in our own thinking which are clearly outdated. But I feel like these instances are probably limited.

There's an enormous amount of behavioural feedback from models. Your assumptions about human behaviour influence your outcomes, which provide normative recommendations about future behaviour.

Probably the best example is maximisation of the utility function (which is just like a happiness function). I suspect people know their own utility functions far better than economists ever will. But if economists try and guess it, and then maximise it, and declare that we're all making sub-optimal decisions, what do we really know? Should we stop doing the things we think make us happy because they're officially not making us happy?

The human ability to guess out solutions is amazing, and shouldn't be belittled. The burden of proof should be on economists to show that our heuristics are wrong. I wonder if we've given economists the benefit of the doubt, because asking them to provide this proof feels like an unreasonably tough demand. It is a tough demand, but it's definitely not unreasonable. If there's any reason to believe one of these economic "myths" could actually be a heuristic, then it seems to me that the economists have to go back to the modeling room and explain why it isn't, before they have the right to start messing with the last million years of development.