Misunderstanding Motivation

13 Apr

I am increasingly fascinated by our collective ignorance of what drives our desires, actions, and visions of delight – as our basest needs are met, wealth and “utility,” the cold economic term for happiness, diverge logarithmically. And I am not the only one focusing on this. Dan Pink did a wonderful talk at RSA on the subject. David Brooks wrote a book and a piece in the New Yorker on this question as well. I can’t go a week without reading a story how wealth and happiness only partially relate at all, and rarely directly.

Our laws, legal system and public policy, of course, will lag such scientific understanding or debate. Transforming new academic positions into productive governmental positions take time. But as the simplistic economic rational actor theory – that all people will logically and predictably choose more of a good than less, and make personal choices to maximize their economic situation at the least cost – becomes more and more exposed as trite and incomplete at best, our laws and policies based upon that theory are revealed as incongruous to the facts. Our tax laws and penal code are based upon the idea that we can induce, encourage, and incentivize behavior (Nudge it, perhaps) based upon cash pay outs or punishments, carrots and sticks, because Americans are rational actors. Let me give two seemingly unrelated examples where that is clearly not the case: NPR and marijuana.   

Lost in the debate about federal funding of NPR, as Republican politicians seemingly wish to exact revenge for some perceived slight, and Libertarians and budget cutters seek to remove the government from educating and informing the public via radio at all, is that if the economic rational actor theory was wholly accurate, NPR should not exist at all. Corporate NPR gets little of its funding from the federal government, but they are merely the news organization that produces the programming. The individual NPR station in towns and cities and rural areas across the country receive the greatest percentage of their funding from individual listeners. But it is in no one’s personal economic interest to donate their money to a radio station. Listening to the news is free, and as far as any individual can tell, the news will appear whether I give money or not. Why pay for an item when I can have it for no cost? That is not economically rational. As a tax break, I get a maximum of 35 cents back to my dollar donated – the rational economic choice is to keep the dollar.  Business donations make up the second major chunk of funding, but there too advertising dollars would be better spent. Why spend $1000 to get a ten second mention on NPR when I can have a full ad in another outlet or venue? Radio host Michael Medved speaks for many conservatives when he says he would donate money to NPR the day federal money dries up. Why? Because just like the motivation to donate to NPR, the debate about governmental funding of it is about a lot more than the economics.

Similarly, laws and public policy fail to account for, control, or incentive the use (or disuse) of marijuana. If man were a rational actor, the punishment for smoking pot would effectively discourage its use. But despite nearly 900,000 arrests a year, or roughly one in 25 who smoke regularly, marijuana remains the third most used recreational drug behind alcohol and tobacco. Roughly one third of Americans have smoked it at some point, and 25 million a year partake. Smoking pot is like speeding, jaywalking and drinking underage – technically illegal behavior that is widely socially accepted and now little influenced by the law. Thirty percent of Americans live in a jurisdiction with lax marijuana laws, and academic studies in those areas (plus Holland and other western nations that have taken similar steps) have shown that Doritos stay on the shelves and productivity does not decline. In other words, everyone who wants to smoke pot is smoking it, the world hasn’t ended, and our rational actor public policy needs to catch up with our understanding of human nature.

8 Responses to “Misunderstanding Motivation”

  1. Brian April 13, 2011 at 10:12 am #

    As an alkie, I’ve observed that stoners don’t do domestic violence, as we do.  “I’m gonna beat the living….oh, look at that light!!!”

    With money comes strings.  Perhaps having the always right-wing government out of NPR would improve its objectivity, since it sometimes shows Republicans in a good light, which is against nature and our knowledge of them.

  2. Ethan April 13, 2011 at 12:01 pm #

    “In other words, everyone who wants to smoke pot is smoking it, the world hasn’t ended, and our rational actor public policy needs to catch up with our understanding of human nature.”

    No doubt!

  3. Gabe April 13, 2011 at 3:54 pm #

    Nice ideas here Brian.

    We could also say that those who have tirelessly contributed to building great FREE, open source products like Linux, Mozilla Firefox and OpenOffice were not acting as “rational” economic actors according tho the anachronistic economic theories you cite.

    Indeed, the fallacious “rational actor” postulation (praxeology) forms the axiomatic backbone of classical liberal economic theory. This bunk oversimplified belief system is completely rooted in metaphysical ethics rather than anything resembling hard (natural) science. I believe the field of Anthropology does a much better job at examining and analyzing human behavior across a wide contextual domain. Any in-depth study of thermodynamics will demonstrate what our industrial system is capable of accomplishing.

    Neoliberalism, the contemporary emulation of classical economics, (more like idealistic propaganda for those who currently enjoy their status as kings of the mountain) can be completely shattered once the fallacies are exposed. It appears you have begun to trek down that very road to intellectual freedom. Our modern reality is pretty much an adolescent (in terms of cultural development) species trying to run a 21st century industrial apparatus on 18th century ethics and social ideals. Time for the smart, responsible, tolerant people of this planet to grow up even more and break the ideological shackles. Eventually, illumination will trickle down to those who might need a hand or two catching up to the 21st century.

  4. Ben McD April 14, 2011 at 1:20 am #

    Please define “personal economic interest”

  5. Brian Castner April 14, 2011 at 8:24 am #

    @ Ben – I assume you are referring to the section in the NPR point about it being in no one’s “personal economic interest” to donate? My PEI, as a rational actor, would be to maximize my own wealth and access to goods. If I can access a good (NPR programming), I should do it for the least cost possible. For NPR, that is free. Paying for NPR is not economicvally rational. Why would I reduce my personal wealth for no purpose?

  6. Ben McD April 14, 2011 at 4:06 pm #

    @ Brian – Have you factored utility into PEI?

  7. Ben McD April 14, 2011 at 4:08 pm #

    BTW, I’m not trying to be pedantic, just trying to get a better understanding.

  8. Brian Castner April 14, 2011 at 6:47 pm #

    Not knowing your background, I don’t know whether to be short and snotty or professorial and long winded . . .

    I don’t think I factor in utility as much as some. To me it seems like an economics get-out-of-jail-free card – if a certain action increased a person’s utility, then a magic wand is waved and it turned out the irrational action was in the persion’s economic interest after all. I prefer the more intellectually honest approach of almost equating wealth and utility, which a lot of economic theories do, if not explicitly. Think about it this way – GDP has been a barmeter for general utility for decades, and is only now being replaced by Happiness Indexes in places like Bhutan (and Britain, strangely enough).

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