In the Boston Review, John McMahon reviews Misbehaving: The Making of Behavioral Economics by Richard Thaler. As McMahon writes, behavioral economics began as a “a challenge to the mainstream neoclassical economics model, which assumes people are rational, utility-maximizing decision-makers with consistent preferences, correct expectations, and unbiased beliefs … behavioral economics, on the other hand, takes into account the ‘bounded rationality, bounded willpower, and bounded self-interest’ of real humans—the propensity to be affected by perceptions, psychological factors, and other influences supposedly irrelevant to the neoclassical economic actor.” While behavioral economics styles itself as a more humane, real-world alternative to neoclassical economics, McMahon contends that it simply extends economic rationality to previously non-commodified areas of life:
Indeed, behavioral economics denies the possibility of feeling, thinking, acting, deciding, socializing, forming relationships, caring for the self, and so on outside of economic logics and economic terms. Quotidian acts such as gifting or eating and socializing with friends, in their deviations from economic rationality, should be understood as behaviors that don’t have to be economized and evaluated in terms of market logics. The same should be said for “larger stake” behaviors as well: forming long-term romantic relationships might just merit entirely different modes of thought than that of buying a car, entering a career, or saving for retirement…
In its reduction of all human actions to equivalent choices, behavioral economics reinforces market hegemony. Flattening all activities onto the same economic plane is a hallmark of the neoliberal project. Neoliberalism can be broadly understood as the construction of rule by and for the market, as critical economic geographer Jamie Peck understands it in Constructions of Neoliberal Reason. In his analysis of American neoliberalism, Michel Foucault claims in The Birth of Biopolitics that one of the more “radical” aspects of neoliberalism is the “generalization of the economic form of the market . . . throughout the social body”; “social relationships and individual behavior” are subsumed under an economic rubric, and people reduced to mere economic actors, doing nothing but making economic choices in all facets of their lives. Even as it tinkers with the theorization of that actor, behavioral economics bolsters this framework. Considering Thaler’s reproduction of market dominance in this way, it is unsurprising that the word “neoliberalism” appears nowhere in Misbehaving.
Photos by Cybele Werts, via Boston Review.