We Don't Need Your "Nudge": Behavioral Economics' False Premise

I am following marketing guru Guy Kawasaki on Twitter (yes, I've made the leap into Twitterland!). Boy, does he 'tweet' a lot of links to articles and websites! It's kind of hard to keep up with him, but this morning, one of his tweet read: "Great piece on behavioral economics and social psychology. Must read!". So, I was intrigued, and followed the link to read this article on NPR's website.

The article describes a school of thought called Behavioral Economics, which blends ideas from Social Psychology with those from Economics to explain why humans do what they do. It was pioneered by two fellow Israeli-Americans, Daniel Kahneman and Amos Tversky.

To quote this article, Behavioral Economics has as its basic premise the idea that "the human animal is hard-wired to make errors when it comes to decision-making, and therefore people need a little "nudge" to make decisions that are in their own best interests." The piece goes on to describe how President Obama is shaping his economic policies with this 'human flaw' in mind - he's going to help us help ourselves, since we can't make decisions that are in our own best interests.

Thoughtful2.jpg

Now, I'm not going to get into politics here. But I do take issue with this philosophical premise that humans are basically no better than animals in that we cannot control our actions with rational thoughts.

Do we make irrational choices sometimes? Yes. Is that proof that we're flawed and need a leader's 'help' to decide for us because we are unable to make good decisions? No! It's only proof that if we don't use all the tools at our disposal, or use these faculties in a faulty way, we'll make mistakes and experience their natural consequences from which we'll learn lessons for the next time.

That's the beauty of the human race: we are capable of learning, of growing, of using our reason to make decisions that are shaped by our observations of reality and guided by our values and principles. That is how we have evolved. That is how we have achieved remarkable progress. Humans act rationally using their logic and decision making faculties in their own self-interest to survive and thrive. It's what separates us from animals.

Here's the problem: The more we are told we are unable to (or prevented from acting freely to) make good decisions about our own lives, the more we become conditioned to ignore or renounce our rational decision making capacity. The less we use this capacity, the rustier it will get and we will relinquish the opportunities to hone this skill and learn from our mistakes. And then, we fulfill the prophecy: we move toward becoming a useless, flawed race in need of a big 'nanny' to take care of us and 'nudge' us to make the right decisions.

Unfortunately, these psychologists and behavioral economists are using circuitous reasoning to 'prove' their point: they cite the detrimental effects of thousands of years of societal suppression of reason and rational decision making on human capacity to use these skills as evidence that humans do not possess these skills. Not so! Not only is this attrition of rational thinking as a result of oppression and so-called 'nudges' by leaders (society, government, religion, etc. - take your pick) not proof of our inability to do it right, moreover, 'fixing' it by adding MORE of the same will only make things worse, not better.

In addition, another big hole in this faulty premise of Behavioral Economics is that somehow the leader IS capable of making the 'right' decision and then 'nudge' the followers into the correct behavior. If humans are so flawed and irrational, then isn't it silly to put any one 'flawed' human in charge of any other 'flawed' human? That's akin to the blind leading the blind, no?!

It's when leaders choose our values for us and coerce us to act against our own best judgment and values that we become confused and disoriented and are more likely to make mistakes. And it's when leaders don't give us the opportunity to choose the right action and to learn from our mistakes that they remove the 'human element' from us and are left with a mere lever-pulling obedient 'animal', devoid of creativity, devoid of critical thinking, devoid of achieving greatness.

What we need to do, then, is seek out and remove contradictions that can get in the way of rational behavior. The role of the leader is to clarify values and vision, set clear goals and expectations that are aligned to those values, and guide followers to make good choices toward achieving those goals.

No, we don't need your 'nudges'. We need your leadership and support.

You Might Also Like These Posts:

Are You Infected with the Responsibility Virus?

A cool tool to lighten your leadership workload AND develop your employees

Ep037: How to make better, faster decisions with Jeff Annello