Wednesday, May 23, 2007

When we were rational

Stuart Armstrong at OvercomingBias has a good post on my new favorite topic:

In the real world, we could always hope that the march of science could replace superstitious explanations with truer ones. But the truth is already out there in these virtual worlds, and is ignored. If these games are the shape of things to come, it might well be that the zenith of rationality is already in the past.

Here's an exerpt from my recent paper "Overcoming Selfishness: Religion and the Alternatives":

Self-deception and belief go hand in hand. It is likely that self-deception evolved as a means to create and maintain belief, because as I have argued, belief works. In his 2002 Nobel lecture, Vernon Smith discusses some of his experiments involving the trust game. He finds that reciprocity is behind cooperation, not altruism or other-regarding utility. In other words, we achieve cooperation by deluding ourselves about our own altruism.
Immediately preceding the “invisible hand” statement, Adam Smith remarks on how wealth is created through the self-deception of the wealthy:

We are then charmed with the beauty of that accommodation which reigns in the palaces and oeconomy of the great; and admire how everything is adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires. If we consider the real satisfaction which all these things are capable of affording, by itself and separated from the beauty of that arrangement which is fitted to promote it, it will always appear in the highest degree contemptible and trifling. But we rarely view it in this abstract and philosophical light. We naturally confound it in our imagination with the order, the regular and harmonious movement of the system, the machine or oeconomy by means of which it is produced. The pleasures of wealth and greatness, when considered in the complex view, strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it.
And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. (TMS, IV.1.9-10)

But Adam Smith generally sees self-deception as an irrational and unsocial weakness that should be corrected:

He is a bold surgeon, they say, whose hand does not tremble when he performs an operation upon his own person; and he is often equally bold who does not hesitate to pull off the mysterious veil of self-delusion, which covers from his view the deformities of his own conduct. Rather than see our own behavior under so disagreeable an aspect, we too often, foolishly and weakly, endeavor to exasperate anew those unjust passions which had formerly misled us; we endeavor by artifice to awaken our old hatreds, and irritate afresh our almost forgotten resentments: we even exert ourselves for this miserable purpose, and thus persevere in injustice, merely because we once were unjust, and because we are ashamed and afraid to see that we were so. (TMS, III.4.4)

I think Smith, and most economists who have followed him, have failed to recognize the ecological value of individually irrational self-deception, i.e. its role in facilitating beliefs which benefit the group.
Robert Trivers (2006), the evolutionary sociobiologist, claims that self-deception evolved as a way to better deceive others. But he recognizes there must be a positive side as well, referring to what McCloskey (2006) and myself would call Hope: “Life is intrinsically future oriented and mental operations that keep a positive future orientation at the forefront result in better future outcomes (though perhaps not as good as those projected). The existence of the placebo effect is another example of this principle (though it requires the cooperation of another person ostensibly dispensing medicine). It would be very valuable to integrate our understanding of this kind of positive self-deception into the larger framework of self-deceptions we have been describing.”
Again, the positive side to self-deception is that it facilitates trust. Why else would it survive the selection process, and why would it continue to be so attractive? Despite the Enlightenment, we are drawn more than ever to myth-makers, inspirational speakers, emotional politicians, and thoughtless celebrities, not scientists and skeptics. Libertarians and economists know this from experience.

Addendum: Michael Prescott shows us the superstitions of a skeptic, Susan Blackmore. (Hat tip to commenter M.C.)


M.C. said...

I think the placebo effect goes well beyond simple hopefulness. For instance, patients are able to have pain-free surgical procedures completed under hypnosis. And a great many physiological changes have been demonstrated in patients who are taking placebo medication.

Will McBride said...

Really? That's almost too wierd for this economist. I'm still trying to break free of the rational choice paradigm. But I like your blog.

Stuart said...

Thanks for your comments and your post here! Interesting reading.
the positive side to self-deception is that it facilitates trust
Can you develop that? I can see many examples where it would decrease trust. Are you thinking of group binding myths?

Copy of my comment on the Overcoming Bias blog:

So when was the zenith of rationality?

Interesting question, that. I'd guess (in complete ignorance) either in the 1950's or the 1985-1995 period. But I strongly believe that we were rational then for irrational reasons (a blind belief in rationality = science = good, to simplify).

Now we're more irrational overall, but those who of us do embrace rationality are more honest and "rational" about our reasons for doing so.

Will McBride said...

That's the rest of the paper, which I can email you. In brief, trust is built through the inculcation of belief in altruism or selflessness. Experiments show we're not really all that altruistic or selfless, but we convince ourselves we are, and that enables cooperation. Some of the institutions which do the inculcating are religion, government, health care, and education.

Will McBride said...

It's not so much group binding myths, because the beliefs are useful both within and without the group, i.e. the beliefs in altruism and selflessness.

Stuart said...

That's the rest of the paper, which I can email you.
Please do - it sounds interesting. My email is

the beliefs in altruism and selflessness.
There are also beliefs in the cruelty and fecklessness of strangers (out-group individuals). That effect seems to dominate a lot in the real world, from my impression.