Psychonomics: How Modern Science Aims to Conquer the Mind and How the Mind Prevails

PSYCHONOMICS

HOW MODERN SCIENCE AIMS TO CONQUER THE MIND AND HOW THE MIND PREVAILS

Eric Robert Morse

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New Classic Books

Copyright © 2014 by Eric Robert Morse at Smashwords.

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Preface

It was a proud moment for the newly re-elected President Obama. In February 2013, amid a stirring State of the Union address in which he championed political wins over the course of the previous four years, Obama then turned his attention to the future and to science.

During the speech, the president unveiled what he would call ‘The Decade of the Brain’, a multi-pronged approach to encourage advances in neuroscience over the next ten years. At its core would be a several-billion-dollar effort to map the human brain. Just as the mapping of the human genome provided one of the great advances in human history, so too would the mapping of the human brain provide the next great advance. Now is the time, he said, to reach a level of research and development not seen since the height of the Space Race. It was to be the dawn of a new age of understanding.

And what inquisitive American could challenge such an initiative? When a president promises billions of dollars for the advancement of science, we are obliged to stand up and cheer. Who doesn’t want to further research and come to better understand the human mind? If we are to follow the standard narrative, Obama’s initiative will produce nothing less than a revolution. It promises the cure to mental illnesses such as schizophrenia and autism, a mastering of human decision-making, and the missing link to artificial intelligence. To use scientific parlance, the initiative will mark a paradigm shift in neuroscience.

Here is the milieu in which we find ourselves in the first part of the 21st century—unbridled support of science and confidence that it will bring us infinite progress and prosperity. To question this stance is unheard of, and to challenge it approaches blasphemy. To be sure, only a fool will defy such a posture. Accordingly, I offer Psychonomics.

This book is not a critique of science so much as it is a critique of its contemporary practitioners and their followers. It is a warning against blind faith in science and can therefore be seen as a defense of the discipline. After all, no true science begins with blanket assumptions, even if they promote the scientific.

The fact is science has always relied upon a thick mantle of skepticism. When that mantle is removed, strange things begin to happen—science no longer makes sense, it can no longer be backed by proof, and we start to see evidence of sloppiness, imprecision, and even fraud. This is what science has become in an age of complete faith in the discipline. The thoughtful observer will note that heaping billions of dollars onto a field of scientific study will not improve the situation. Guaranteed funding with amorphous goals is the path to ennui.

Some might recall that Obama’s initiative isn’t the first ‘Decade of the Brain’. In July 1990, George Bush I signed a presidential proclamation in which he stated that the 1990s would be the ‘Decade of the Brain’. Dedicating hundreds of millions of dollars for neuroscience research, Bush also touted a dawn to a new age of understanding. But the enlightenment never came; one will be forgiven for reservations about the sequel.

In Psychonomics, we begin our study with the mesmerizing new field of Behavioral Economics, a kind of melting pot for all the new brain science going on. In the first part, we take a look at Behavioral Economics’ prominent conclusions and its practitioners’ methods. In the second part, we take a broader view to see exactly how a science like Behavioral Economics can be misunderstood and misled. Altogether the reader should be treated to an insightful tour of the brain sciences as they stand at the opening of the 21st century.

Each chapter features a case study that underscores its main points. As is the fashion in Behavioral Economics books, some of the cases are well known and others are novel. Where appropriate, I used pseudonyms and combined accounts to provide a more fluid examination.

Toward the end of each part, the reader will find a survey of a number of specific items. In the first half, we look at several instances of cognitive errors; in the second half, we look at several scientific fallacies. The references offer a more systematic approach to the study, though the surveys are far from comprehensive.

So let us examine these institutions, their achievements and shortcomings, and above all let us enjoy the wonders that true reflection brings. For, as Emerson said, Men love to wonder, and that is the seed of science.

Introduction: The Irrational Years

You may not realize it, but you are irrational.

At least, that is what researchers in a growing new science are saying. That science is Behavioral Economics, and it is changing the way we see human thought and action.

You will pay more for a bottle of wine if it is sitting next to an expensive bottle than if it is sitting next to a cheap one. You will go out of your way and spend money to obtain a free drink or T-shirt even if it is something that you don’t want or need. You fear plane crashes more than car crashes even though plane crashes are much less common and are much less likely to kill you than car crashes. And, like the vast majority of us, you think you’re above average at driving, attractiveness, and smarts. In short, you are irrational.

Now, you may feel levelheaded, you may even think you make some good choices here and there, but the science is hard to refute. In the last few decades, a number of disciplines have converged at the spot where Behavioral Economics now stands. Cognitive Science, Neurobiology, Psychology, Sociology, and traditional Economics have all made significant advances in the latter half of the 20th century and beginning of the 21st, giving us a comprehensive view of how the brain works and how we make decisions as a result. In short, Behavioral Economics uses brain imaging and psychological experiments to explain exactly why we do the things we do.

What they’ve found counters everything we know about human thought and decision-making. To begin, science shows that we don’t make decisions based on intentional deliberation like we think we do. Studies have found that almost all of what we think and do is based on brain processes that occur below the level of consciousness, in the subconscious or unconscious mind, as it is known.

Estimates are that sense organs take in more than eleven million pieces of information every second, and that only about 50 of those pieces can be processed consciously°. Think about that—eleven megabytes of information every second—that’s War and Peace three and a half times in a split second. And only about 50 of those bytes—a single mention of ‘Pyotr Kirillovich’—can be focused on and made sense of.

Information transmission rates of the senses

So what happens to the rest of those eleven million pieces of information? That is where the subconscious comes in. With its immense, modular processing capacity, the subconscious brain is where pretty much all of our thinking—and thus imagining, decision-making, and goal-seeking—takes place. How we walk, talk, and drive to begin with, but also how we select groceries, identify good leaders, and choose career paths—all of these have been shown to be heavily influenced, if not completely dictated, by automatic subconscious systems and not conscious thought as was formerly believed.

The implications are patently Freudian: Most of what we experience is made up of unthinking processes. The substance that makes us who we are is almost wholly made up of the unintentional and instinctive activities of our brains.

As researchers have shown, this unconscious thought often results in harmful and self-defeating actions. Over the course of forty years, researchers have conducted scores of experiments that show how people reliably make choices that are based on random influences and that go directly against their own intentions. People are so irrational, it turns out, that they often hurt their own interests.

Different studies focus on different aspects of behavior. The result is a list of some 100 ‘cognitive errors’ that span the gamut. Cognitive errors are mistakes that we make in the decision-making process somewhere between sensory input and bodily action. The more familiar errors include the Anchoring Effect, where people base decisions on information ‘anchors’ even if those anchors are irrelevant to the decisions; Loss Aversion, where people fail to make economically sound decisions simply to avoid loss; and the Halo Effect, a part-to-whole fallacy where people tend to judge someone’s entire person based on a single, specific attribute.

According to behavioral researchers, everyone is subject to these errors at any given time, even when intentionally trying to avoid them or aware of viable alternatives. This is how we end up paying more for wine that we want, going out of our way for a free item that we don’t want, and viewing ourselves as above average at just about everything when we’re really not. Whether considering day-to-day household activities, consumer preferences, career choices, executive decisions, or political elections, all of the science leads to the single, provocative conclusion that human beings are irrational and cannot be trusted to make the right decisions on anything.

Practically all of the Behavioral Economics literature out these days comes to the conclusion that philosopher David Hume came to nearly 300 years ago: Reason is, and ought only to be the slave of the passions, and can never pretend to any other office than to serve and obey them. When virtually all of one’s mental processes take place without awareness, and when one reliably shows contradictory preferences and actions, the inference becomes awfully compelling—we are unthinking beasts in a jungle of possibilities.

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The consequences of these findings are vast and have only been touched on in the popular literature. One thing is clear: If humans are irrational, then we’re in a lot of trouble. So much of our society hinges on the premise that we are reasonable and able to make the right choices throughout the day—at the grocery store, on the daily commute, in the media, at the office, at the voting booth, and so on. Really, the entire free market, democratic system is based on the notion that human beings are rational.

And this is why the recent Behavioral Economics findings are so important. If they are correct, it means that our entire system is built on an illusion and is thus at risk of falling apart.

Not surprisingly, in light of the findings, arguments have been made to curtail the various choices that people have and to direct them toward more consistent and rewarding decisions. The notion is, since we are irrational, we need to be taken care of; since we can’t make the right decisions when it counts, someone else must make them for us. A variety of solutions have come forth in the popular texts, though all center on this fundamental argument.

In his book Predictably Irrational, behavioral economist Dan Ariely suggests that humans consistently make poor decisions to the extent that this conduct is expected or ‘predictable’. He goes so far as to refute supply and demand altogether, saying, If you accept the premise that market forces and free markets will not always regulate the market for the best, then you may find yourself among those who believe that the government must play a larger role in regulating some market activities, even if this limits free enterprise.° In turn, he encourages regulations and safeguards on all kinds of social organizations—between doctors and pharmaceutical companies, in sex education, and in the insurance business°. When people aren’t rational, government must step in and take over.

In their bestseller, Nudge, behavioral economist Richard Thaler and jurist Cass Sunstein promote the use of ‘choice architecture’ to direct or ‘nudge’ people toward making good choices. Their work has garnered praise from all corners of the political spectrum for introducing creative ways to encourage better decision-making. One such prized nudge is Save More Tomorrow, a personal finance mechanism that charges people a fee to withhold some of their income in the interest of growing their savings. Other nudges cover issues from organ donation to saving the planet°. Simply, people are not capable of consistently making the right decisions, so, with the help of businesses and governments, they must trick themselves into doing good.

In another arena, journalist John Cassidy examines the rise of what he calls ‘Utopian Economics’ with his book How Markets Fail. The idea is that the modern economy has been built on what he considers a utopian ideal that all people are rational agents working in their best interests. Since of course all utopias are imaginary, the system must be built on shaky ground and will occasionally go through periods of decline and financial distress as a result. Cassidy shows how the recent real estate bubble and subsequent financial crisis were the inevitable outcomes of such reveries. The only way to fix it, Cassidy argues, is to instate a grounded ‘Reality-Based Economics’, which entails large doses of government regulation and safeguards from human folly°. The rational actor is a fiction, and so government must step in and make sure people don’t do stupid things and harm themselves.

Others take a more therapeutic approach. In his bestselling Incognito, neuroscientist David Eagleman argues that bad choices and anti-social behavior are genetic and can only be corrected by ‘warehousing’ (locking up) criminals and giving them psychotropic drugs. People cannot be blamed for bad behavior or even crimes—their bad decisions are biological and so must be treated in a biological, psychopharmacological way. Poor decisions are to be expected; the solution, Eagleman says, is to turn off our natural characters by means of drug therapy°.

The prescriptions are not limited to a few obscure theorists—Eagleman, Thaler, Sunstein, and the rest are the well respected in their fields. And thanks to their work, Behavioral Economics is becoming a mainstay in American discourse. An attentive bystander cannot go far in business or politics without hearing terms such as ‘Loss Aversion’, ‘Overconfidence Bias’, or ‘Planning Fallacy’.

One of the early pioneers of Behavioral Economics, Daniel Kahneman, recently published his Thinking, Fast and Slow with the intent of providing standards for talking about the various intricacies of Behavioral Economics, the errors and biases, and their implications. Owing to Kahneman’s book, the reader now knows how to identify availability biases, how to assess one’s risk aversion, and what to make of that pesky regression to the mean.

As a result, one can hear the terms in daily conversation at home, at school, and at the office. At least one health insurance provider has recently touted its new plan, which was designed with attention to Behavioral Economics throughout°. And the trend has swept all the way to the top: In recognition of his work on Nudge, co-author Cass Sunstein was crowned ‘Regulation Czar’ in the Obama administration, a title that has been affectionately dubbed ‘Nudge Czar’°. The upshot has been a steady swelling of new programs and policies based largely on the science.

New York Times columnist David Brooks summarized the success of Behavioral Economics in praise of the revolutionary work of Daniel Kahneman and his late collaborator Amos Tversky, saying their research will be remembered hundreds of years from now, and how their work helped instigate a cultural shift that is already producing astounding results. Because of the sensation Behavioral Economics has caused, it might not be a stretch to consider the past decade as the irrational years.

And, one must admit, the appeal of Behavioral Economics thinking is rather irresistible. Its success is due largely to the fact that it has been developed by a group of brilliant minds, from which Kahneman and Tversky are standouts. These researchers and others have provided some of the most fascinating discoveries in science in recent times. And the future promises more of the same.

But the objective spectator will not be so easily convinced by the conclusions reached by behavioral economists or the measures taken to counteract them. After all, rationality is a dear possession for most of us, and, whether we actually own it or not, will never be tossed aside nonchalantly, even by ardent believers of modern behavioral research.

And so, before Behavioral Economics is enshrined as the definitive truth of human thought and action, a thorough appraisal is called for. Are the foundations of the science sturdy? Are its methods sound? Are its conclusions viable? Or is the fervor for the science exaggerated in any way or otherwise misleading?

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The skeptic begins his scrutiny with the very premise behind Behavioral Economics. The discipline has always been about human beings’ irrationality, and yet those involved in the study are scientists, conducting scientific research, and proposing scientific inferences, all of which requires human rationality. We are left to believe that everyone is irrational except for those claiming that everyone’s irrational. The irony of Behavioral Economics is that it has tried to disprove rationality by means of rationality; it disowns reason by using reason.

This paradox is displayed wonderfully in Malcolm Gladwell’s bestseller Blink, in which the author promotes the concept of ‘thin slicing’, or what he describes as thinking without thinking°. The premise is that thinking the old-fashioned way—deliberate reasoning and scientific study—leads to abstractions and ultimately misguided decisions. And so we should do away with the abstract scientific thinking in favor of quick, intuitive thinking. But, in order to prove this theme, Gladwell presents a number of very well thought-out experiments that break down exactly how people think and make decisions. Ironically, he uses well-reasoned arguments and thorough analysis all in effort to show why people shouldn’t use reason and analysis.

The average reader ends up scratching his head. If reasoning is so precarious and thinking so unreliable, then doesn’t that make Gladwell’s well-reasoned, scientific argument precarious and unreliable as well? Gladwell uses abstract experiments to show why abstract experiments cannot be trusted. Doesn’t that mean his argument cannot be trusted and that reasoning might be okay after all? Of course, that would make his argument more credible, which would mean science is incredible . . . and so on. The intellectual loops one could go in are alone exasperating to think about.

But what does it mean to be rational? As it turns out, no one in the Behavioral Economics texts ever thinks to define ‘rationality’ or how it comes about, and so claims on human irrationality are hardly ever well founded. Rationality is a familiar concept, so most authors take its meaning for granted. But, since the definition is not clearly laid out, writers are free to add to and subtract from it at leisure, whenever it suits their argument. At one point it is rational to do one thing, and later it is irrational. The result is a flimsy sketch of reason that more often than not wavers and even contradicts itself.

In the 2009 How We Decide, for example, author Jonah Lehrer investigates the rationality of teenagers with respect to staying in school°. His argument is that teens’ brains are not fully developed and so cannot make rational decisions when it comes to long-term goals like education and career. According to Lehrer, Teens make bad decisions because they are literally less rational.

He then goes on to explain how state governments have made moves to counter this irrationality to get kids to stay in school longer. Lehrer describes how the state of West Virginia instituted a program that actually got teens to stay in school by threatening to take away their driver’s licenses. Teens don’t care about grades or career, but they do care about cars and freedom. So the state instituted a law that stripped dropouts of their licenses. Evidently the program worked, and West Virginia’s retention rate has risen since the law was enacted.

Now, to Lehrer, this was a way of getting around teenage irrationality, but the discerning observer will realize that the teens are making decisions that are just as rational as any other decision—they are just based on different incentives. Teens will not stay in school to get a degree or to listen to teachers, but they will stay in school in order to keep their driving privileges. And who is to say that this is any less rational? Perhaps a degree holds no apparent value to them; perhaps the teachers are really bad. A brief visit to West Virginia public schools might show just how reasonable it is to drop out and how much of a leap it is to say that it’s irrational.

Behavioral economists make these kinds of leaps in logic as a matter of course. What is most interesting about these intellectual hijinks is their inherent contradiction. The authors want to make a point, naturally, but all points must be backed by a reasonable argument to be interesting at all. In order to prove that people pay more for a bottle of wine, they have to explain why they do it; in order to show that people fear plane crashes more than automobile accidents, they have to show the rationale behind it. In general, in order for behavioral economists to prove that people are irrational, they are forced to explain that irrationality in one way or another. It just so happens that describing why people do things, whether the authors realize it or not, is giving a reason for it. And, when there is a reason for an action, it must be reasonable at least in some way.

In the West Virginia example, it was assumed that teens drop out of school because they aren’t thinking. But in order to prove that they aren’t thinking, Lehrer delves into their thought process and reveals that indeed they are thinking. They aren’t thinking about grades or college, they’re thinking about cars and freedom, but they have reasons for their actions, and so it must be seen as reasonable to some extent.

Nearly all references to rationality in the Behavioral Economics texts are liable to the same incongruity. In Predictably Irrational, Dan Ariely chronicles a number of supposedly irrational things that people do, and then goes on to explain exactly why people do them, giving very logical reasons for the behavior. Take, for instance, Ariely’s survey of the supposed irrational desire for free goods. He describes a number of experiments in which people chose free goods over much more valuable goods that came with a price tag. Why do we have an irrational urge to jump for a free item even when it’s not what we really want? he asks rhetorically. And then, he promptly answers, Most transactions have an upside and a downside, and, when something is free, we forget the downside. In other words, there is no downside to the decision-maker, and so it seems as though he really wants the free good more than the pricier option. By explaining his argument, Ariely gives good reason for the behavior of his subjects—people want the free good because there is no risk, which is perhaps the most rational decision there is.

If scholars give good reasons for human irrationality, then the fundamental premise that humans are irrational must be wrong. Everything we do, even if it seems irrational, is based in some sort of reason. Paying more for free goods, fearing plane crashes more than car crashes, and thinking we’re above average at everything, all have very reasonable origins (we’ll take a closer look in later chapters), and so must be considered reasonable, themselves.

In philosophy, this is called the Principle of Sufficient Cause. If a rabbit appears on your desk, you won’t say, Oh, well, rabbits just happen. No, you’ll try to figure out how it came to be—perhaps it fell from the ceiling or jumped from the floor. Perhaps a magician pulled it from his hat. If no material cause can be found, you’ll attempt to come up with a mental cause—hallucination or hypnotism or psychedelic drugs. In the end, some cause will be found; a reason will be given.

The same goes for Behavioral Economics. The fact is that people do things for reasons; they might not be admirable reasons, and they might not be the reasons that researchers are looking for, but they are reasons. And, contrary to popular assumption, this makes the actions rational. Behavioral Economics books are interesting and the reason why they are interesting is because they have a point. It wouldn’t make for much of a read if someone wrote about all the stupid human things people do and then fail to give a reason. They’re interesting books because there is a reason for these supposedly unreasonable things we do. Ultimately, the very premise of Behavioral Economics is contradictory and must be taken with a healthy dose of skepticism.

But what about all the experiments? Don’t they all prove that we do things against our intentions and best interests? Here again the skeptic has valid concern. That is because most Behavioral Economics studies are based in thought experiments, psychological tests, and surveys. While this does not mean that the conclusions are automatically false, it does mean that findings are limited—a fact that researchers and writers are seldom able to guard against.

The problem lies in the nature of scientific studies in general. Studies such as those examined in the Behavioral Economics texts necessarily abstracted from reality, and so the results can only be applied to real life with caution. For example, an experiment that asks the participants to choose between two different bottles of wine necessarily strips away all ‘irrelevant’ factors such as the subject’s real world status and financial standing. It cannot therefore determine how the participant would behave when status and financial standing are taken into account.

This does not diminish the studies themselves—the experiment must do this to remain consistent and objective across the spectrum of test-takers. But by doing this, the experiment becomes unrealistic. While it might tell researchers something about the way we answer questions in test-taking situations, it cannot reveal what we would do in real life situations when ulterior factors such as status and financial standing play significant roles.

Of course, all science is subject to the same difficulties—experiments are imperfect replications of real life and so cannot be used as perfect predictors. This does not mean that the science is unable to provide insight; just that any insight must be accompanied by caveats. As it turns out, behavioral economists are quite good at neglecting these caveats.

As one can easily see, most of the studies in the Behavioral Economics literature are conducted by university professors on college campuses. This fact alone means that most of the experiments feature college students as their subjects, a sample that cannot possibly reflect the true make-up of a population, especially in the realm of Economics and decision-making.