Frauds, Obamaites, and the “Power of the Nudge”

Ariely, who the New Yorker beautifully dubs “an enigmatic swami of the but-actually circuit,” got famous with books — and talks — bearing titles like Predictably Irrational. Behavioral economics’ major insight was that people often don’t act rationally, contrary to the assumptions of neoclassical economics.

For upper-middle-class audiences — and more importantly, elite policymakers — that was a compelling revelation. You see, the main problem in economic life wasn’t exploitation or plutocracy. No, the real issue was that people are idiots. If you were a smarty-pants meritocrat, it was delightfully hopeless and hopeful all at the same time. Hopeless because human fallibility is a permanent condition of the world, but hopeful because rather than enacting broad, redistributive changes, we could just make small tweaks that tricked us into behaving better.

In one of Ariely’s famous, much-touted (and now revealed to be fake) findings, signing an agreement to answer honestly at the top of a form rather than at the bottom improved truthfulness. In another of the field’s now-discredited interventions, changing the organ donor default on a driver’s license from “opt out” to “opt in” was found to boost donations.

Behavioral economics was one of the intellectual foundations of the Obama administration (though it’s a bit lofty to use the word “intellectual” for a field whose most successful practitioners have long put more effort into TED talks, bestsellers, and catchy-sounding exhortations than peer-review and fact-checking). Behavioral scientists like Cass Sunstein featured prominently, and the administration was enamored by “the power of the nudge,” the field’s term for the policy tweaks that can adjust behavior for the better, whether saving for retirement or stopping smoking.

The “nudge” was beloved by the Obama administration because while its bright young nerds were committed to a message of progress, they were so fully owned by the rich donor class and big capital that real progress on most problems would have been impossible. Enter behaviorial economics.

Instead of passing single-payer health care, we could blame ourselves for our bad habits and let the more intelligent young Ivy League men running the government trick us into not getting cancer. Instead of strengthening Social Security and public pensions, we could privatize public programs and allow the financial sector to rob our retirement funds but “nudge” ourselves into saving a bit better or enrolling in a 401K plan. Behavioral economics nourished the hope that an austerity-minded government could still accomplish things. Obama even issued an executive order in 2015 directing all branches of government to plumb the insights of behavioral science.

It’s funny, now, that most of the research on dishonesty was made up. But the recent news — and the way it’s been received in the mainstream media — has bigger implications, suggesting the era of small, nudgy policy solutions is probably gone for good. While in 2008 the New Yorker reported on Ariely with a straight face, this year, Lewis-Kraus observes, in his just-published article, that the now-famous fraud started a lab at Duke University called the Center for Advanced Hindsight, which was funded by BlackRock and MetLife.

Lewis-Kraus doesn’t merely mock and expose Ariely and the many other swindlers in the field: his reporting questions the entire ideology underlying the Obama administration. He writes that in “the past few years, some eminent behavioral scientists have come to regret their participation in the fantasy that kitschy modifications of human behavior will repair the world.” He notes its emphasis on the personal over the systemic and quotes a University of Chicago economist saying, “This is the stuff that CEOs love, right? It’s cutesy, it’s not really touching their power and pretends to do the right thing.”

Beyond the Nudge

It’s to be expected that the mainstream media would cover fraudulent research and that fellow academics would condemn the fakery. But if you remember the Barack Obama years, it’s shocking to see so many going further and criticizing the notion that policy focused on little “nudges” could help anyone but the capitalist class.

While it’s lamentable that famous academics are making things up, it’s heartening that even some part of the Democratic consensus are moving left and away from solutions that don’t redistribute wealth to regular people, remove carbon from the atmosphere, or otherwise solve serious problems. There are other signs the politics of pathetic tweaks are at an end: the election of Shawn Fain to the United Auto Workers presidency, the appearance of Joe Biden on a picket line, the billions invested in green jobs and infrastructure, and the presence in government of Alexandria Ocasio-Cortez and other members of the Squad.

The behavioral science moment seems quaint now, partly because of the widespread acknowledgement that so much more is at stake in policy arguments than our individual, muddled decision-making — and partly because we know that the nation’s most important problems, from inflation and the climate crisis, to low wages and the threat of the far right, are too big for petty TED-talk trickery.