Neuroeconomics

While I too am sceptical about the techno-ebullience associated with MRI scans what is interesting about the self-defeating claim in a cheekily entitled Economist article “Do economists need brains?” is this quote:

neuroscience could not transform economics because what goes on inside the brain is irrelevant to the discipline. What matters are the decisions people take—in the jargon, their “revealed preferences”—not the process by which they reach them.

The Economist is referring to an article by Faruk Gul and Wolfgang Pesendorfer entitled  “The Case for Mindless Economics.” Now whatever my scepticism, it seems the aforementioned quote is perverse. As the journalist rightly says Hayek certainly understood that markets do not rest upon “rational” behavior (Hayek, 1944, p.64; 1988, pp.53-54) but more importantly appreciated the essential place of mind in any explanation of sociality. This can be found across his work and in his neglected work (1952).

References

Hayek, F. A. (1944/1976). The Road to Serfdom. Chicago: University of Chicago Press.
Hayek, F. A. (1952/1976). The Sensory Order. Chicago: University of Chicago Press.
Hayek, F. A. (1988). The Fatal Conceit: The Errors of Socialism. Chicago: University of Chicago Press.