Thursday, February 6, 2014

Irrational rationality

I wonder how many other "natural" behaviors of Homo economicus are actually caused by the "market" rather than human nature:
A well-known example of irrational decision-making people's tendency to overvalue the things they own (I would pay $1 for a coffee mug but will demand $5 for an identical coffee mug that happens to be mine). This bias of "the mind" is called the "endowment effect" and is often assumed to be universal (and therefore explained as the work of evolution). But in this paper Coren Apicella, Eduardo Azevedo, James Fowler, and Nicholas A. Christakis found that some people and some minds don't have this bias at all. Rather than being built-in to human nature, they write, the endowment effect may be a habit of mind that people learn in market-oriented societies. If that's true, it means that (for this trait at least) the hunter-gatherers described in the research were more rational before they were exposed to modern capitalism.
Want to Make Hunter-Gatherers Irrational? Expose Them to Free Markets (Big Think)

I also wonder how much it has to do with indoctrination as well. Most of the nostrums about the "free market" are contradicted by people's experience on literally a daily basis (multiple competitive businesses, free choice of employers, etc.), yet people still believe in them without question. We have a word for that-religion.


  1. While I agree with your assessment of the cult of economics, I think this study leaves much to be desired. Maybe the unexposed reason, well, heck, the objects are identical, so I am happy to exchange them, to please the experimenter. While the exposed reason, well, they are identical, so screw this nonsense, I am keeping the one I have. The difference being that the first group pay more attention to the relationship with the experimenter.

  2. How are "multiple competitive businesses" and "free choice of employers" contradicted by daily experience? The only products I can think of where I don't have numerous alternative sellers to choose from are either very, very niche specialty items, or local utility monopolies, or products under patent (note two of these are government-enforced monopolies). Likewise, almost everybody has a vast number of employers to choose from, unless one is some combination of unskilled, living in a rural area with difficult transport and not much economic activity, or lacks the modest savings to ride out even a short period of unemployment.

    The endowment effect has been demonstrated in both monkeys and chimps ( It's of course possible that the effect is "triggered" by one's exposure to trade and economic exchange, and therefore not observed in subsistence hunter-gatherers who've never engaged in even the simplest forms of trade. Likewise, people who are never exposed to language don't learn to use it; it doesn't follow that language is "unnatural."

    Anyone who wishes to live above the most bare-bones subsistence lifestyle has to engage in trade and exchange of some sort, regardless of the larger formal political or economic arrangements. Furthermore, history shows that when market forces are suppressed (as in the USSR, or to a lesser degree in Western "mixed economies" today) people invariably resort to black-market exchange.

    1. “Likewise, almost everybody has a vast number of employers to choose from […]”

      Can I choose not to be employed and not die of hunger? What? I'm forced to participate in this bullshit economy or perish? So much for free choice. And yes, you have a vast choice of employers if you are a replaceable cog in the machine. A cog that can be used anywhere. But if you are a human with limits, a human who can not adapt to every damn thing in a lifetime, a human who can not be retrained to become whatever the Market wants him/her to be…well, then you are screwed. I sure am.

  3. I certainly don't "choose" to work where I do, which makes me incredibly depressed. I certainly don't "choose" to work the amount I do, or do what I'm doing. I don't "choose" to work with the people I do. I have no choice; I have to sell my labor power to survive. I've tried to find work elsewhere, but nobody "chooses" to hire me, probably because I don't have Master's degree, because I didn't "choose" to sink myself another $25,000 or more in debt. Of course, if I did I would have to "choose" to be homeless, since I wouldn't have any way to pay my mortgage/rent. Otherwise, part-time takes six years no matter where I go (not much choice there), and there are no cheaper options - so much for "choice." If you want to participate in certain professions you have no "choice" at all. I could do something else of course, but at my age, I don't think a lot of people would "choose" to hire me, and no one's going to "choose" to buy my food and put a roof over my head for me. I could "choose" to work for minimim wage, I suppose. I'm trying to change things, and I'm not saying everything is predestined, but to say I have what amounts to truly "free choice" in any of this is insulting, demeaning and preposterous. And I don't think I'm the only one.

    I don't "choose" to be chained to my desk for forty hours a week. I didn't "choose" to be stuck in the brown-nosing, class-based corporate culture. I didn't "choose" to work for a venal, right-wing principal. I didn't "choose" to lose my job and everything I owned like I did in 2001. I didn't choose to live in a decaying oligarchy liquidating its middle class. Why the fuck would I "choose" any of that? I didn't choose parents who were failures did I? I didn't "choose" to be an only child. I didn't "choose" to be born in the Rust Belt. Looking back at my life, my "choices" were constantly circumscribed. But I'm sure it's all my fault somehow, because everything is in America, isn't it?

    I don't choose my internet service provider, because there are only two and they charge the same thing. I don't choose where to get my electricity or natural gas, I just have to pay it (we have "privatized" utility companies here). I've published this chart before. We certainly don't have many choices for president, do we? Corporations carpet bomb us with advertising on a daily basis to make sure that we don't exercise our "free choice."

    Who "chose" to ship our factories to China? Who "chooses" to work at WalMart or Subway for minimum wage? Are more and more Americans "choosing" to be unemployed? Is everyone "choosing" to work overtime, or they afraid of losing their jobs? Why would anyone voluntarily make these choices? And if they're not vountary, then how do you explain them? Come on, get real!

    Most people I know are trying to do the best they can in a harsh world. To say they have total choice betrays either rawhide ideological blinders, or an extremely sheltered life. Really, everyone you know chose to be doing exactly what they're doing and be exactly where they are? There's no way I can buy that based on what I see every day. But I'm sure it's all their fault, too, right?

  4. And don't bang out about he bullshit that this is all government's fault. If that were true, Western Europe would be more of a hellhole than here, which it's decidedly not. If that were true, why did people working for wages see increased incomes from 1950-1973? The biggest hellholes are the ones with no government regulations at all (love that Beijing smog). Crony capitalism is capitalism; the unsullied variety simply doesn't exist. The "pure" capitalism of your imagination is just a fantasy that's never going to happen, like the classless society. Go back and reread the previous post. The entire system is built on offering you what amounts to a series of Hobson's choices, except for a few lucky ones. If it didn't, it would vanish.

    Yeah, to some extent there are always choices. You can choose to step in front of a bus. Every day you don't blow your brains out is a choice (and one which I'm starting to seriously question). But to extrapolate this to a world of total "free choice" is ridiculous. Do you think the world you see around you today is the way it would be if people truly had "free choice?" Do really think eliminating all government will solve all our problems? If you do, nothing I say will make any difference.

    Isn't eveything just so nice and perfect in your little just-world frictionless free-market utopia? Look around you? Do you see a world of happy smiling people where everyone lives by "free choice?" If so, can I come and live there? Because it's sure as hell not the world I'm fucking living in. I see people depressed and broken, on antidepressents and with the thousand-yard stare of the walking wounded. But it's all their own fault, right? After all, they had "free choice."

    That's what I meant.

    Honestly, I'm so fucking sick of all this. I feel like I'm banging my head on a fucking wall. I'm not at all in a good mood lately.

    1. Hugs.

      Heh. Try living in an effing ecovillage that is not at all what it seems. What the fuck do I do now?

    2. Very well put, escapefromwisconsin. This should be up on billboards everywhere just to annoy the hell out of fuckers living in La-La Land.

      By the way, hugs. Did you folks hear about the 60-dollar hug? Yeah, you can pay someone to hug you if you are lonely. There is always someone to make a buck out of someone else's misery. Ain't it the best of all possible worlds?!


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