Desire Makes Sales and Sales Make Desires, Research Time, 15/03/2018

You can’t understand how capitalism works without understand the economic power and role of desire. It’s an inherently transdisciplinary inquiry.

Your first instinct might be to look to economics for comprehensive analyses of capitalism. It’s an economic system, after all. But economic models have a hard time dealing with desire.

Psychology has a lot to say about desire, but nothing to say about economics. So it’s really hard to wrangle a psychological concept or principle into economics. One route that I think is promising is political economy, the return of economics as a field to its roots in the pre-disciplinary studies of writers like Adam Smith and John Stuart Mill.

Pictured: The Rational Man

The problem is, economics shouldn’t make a straightforward return to its origins. An enormously destructive idea emerged from the origin of economic science. The Rational Man.

The concept has grounded their models and analyses for almost the entire history of the discipline. The idea makes perfect sense on the face of it. It's the presumption that people intrinsically act in their best interest, given their knowledge at the time.

It’s perfectly believable because we all believe this about ourselves, don't we? It’s definitely how most of us portray ourselves to others. If someone interviewing me for a job asks me how I make decisions, I’m going to describe a methodical, rational process. I’m not going to admit that I sometimes act from emotional or unreflective gut reactions. I mean, I could – but not without expecting that I’ll never see that office again.

The field of behavioural economics has overcome the reliance on human rationality. But aside from a Nobel Prize for its innovators, economics as a whole has yet to accept its basic idea – humans are a-rational actors.

We make decisions – including those relevant to economics – by a combination of reason and emotions, as well as cultural, class, and racialized biases. Our entire assembly of desire feeds into our actions. Behavioural economics understands this, but hasn’t yet followed the logic through to its conclusion.

You see this short stop when you look at the proposals for political and institutional change that emerge from behavioural economic analyses. Nudges, they’re called. Small, but consequential changes to people’s physical, social, and media environment that makes the more reasonable choice in different situations appear more sensible or easier. Even if that choice is actually more obscure, complicated, or difficult.

Not that kind of nudge, no. Too bad, really.

It’s a very effective policy approach. The problem is that it’s difficult to reconcile democratic values with a governance style of secretly modifying the physical environment of your entire society to condition people’s choices. I’ve written about the troubling character of government through nudges before.

The most obvious problem with the concept of the nudge is that it’s inevitably anti-democratic. The democratic relationship* depends on transparency and trust – they’re the norms of mutual respect among and across people, families, groups, cultures, companies, governments, institutions.

* Whether that relationship is among individual people, families, groups, cultures, companies, governments, institutions; among and across all those scales.

Here’s a nudge procedure that I read about in Joseph Heath’s Enlightenment 2.0 a few years ago. Detergent caps are designed to deceive you about how much you need – they’re too big, and the volume markers too faint to see. So the solution is a law regulating the size of laundry detergent caps.

Apply this generally, and you have a legal system enforcing fractally detailed rules to condition people to behave rationally without any self-knowledge of it. All transparency between people and their institutions disappears.

That’s one problem with the political economy of some approaches I’ve seen to behavioural economics. I have one more. The nudge goes too far to control humanity, but it was conceived as a way of freeing humanity – free us from our own inadequacies and ways the powerful use those shortcomings against us.

The nudge still manipulates the human power of desire, but real freedom lies in changing the character of that power. Don’t presume our enlightenment – enlighten us.