Monday, May 25, 2009

Why are we more dishonest now?

Why are we more dishonest in the twentieth century, than the nineteenth?

Because we have oversimplified man's social behavior. Economist's models of the human mind, and the trickling of said model to the rest of our interactions have led to 'incentive systems' that override an older finer grained set of social cooperative regulators that have been genetically embedded in most of us.

This means that: 'Man as a rational beast will cheat or steal in so far as it is worth the risk'. Now thinks our elite, now think all of us. This simplification has been useful in laying a foundation for more elaborate treatise, theory and social-economic policies; but fortunately for us, the flaws are readily visible and as we continue to perfect our theories, these views are changing.

Behavioral economics, led by people like Dan Ariely (, are working on fixing this, by bringing more accurate psychological models of human behavior into economic predictions and economic policy making.

So: books like Freakanomics (, as popular as they may be, still miss a very important point: It's not just about money!!!!

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