Both liberals and conservatives need behavioral economics lessons

David Brooks doesn’t actually use the phrase “behavioral economics,” but it’s clear that’s what he’s talking about when he says both conservatives and liberals currently hold fast to rationalistic, mechanistic versions of macroeconomics.

And, you know something? He’s right.

Blind faith in the “invisible hand” of Adam Smith and conservatives has been shattered – and not for the first time. But, as Brooks notes, Keynesian economics is pretty mechanistic itself, with faith in government stimuluses and debt-based pump priming believed to be tools to also get “rational actors” acting rationally again.

Well, behavioral economics points out that we aren’t normally rational actors. Or even close to it.

Of course, truly progressive thinkers have long known that.

And, as for yours truly, I’ve pointed out in the past that Smith’s “invisible hand” is grounded in his Enlightenment Deism, refuted by world wars, the Holocaust, nuclear weaponry, etc.