Use a Brain Scanner, go to Jail
Brain Scanner
The July Scientific American article “The Science of Economic Bubbles and Busts” is quite a mess. It is a monument to scientistic reduction and obfuscation. Neuroeconomics? It seems that there is no limit to the self-seving and costly nonsense people can get up to when you let them play with brain scanners!
“A high-tech fusing of neuroimaging with behavioral psychology and economics has begun to provide clues to how individuals, and, aggregated on a larger scale, whole economies may run off track.1 Together these disciplines attempt to discover why an economic system, built with nominal safeguards against collapse, can experience near-catastrophic breakdowns.”
What is called economic behavior is really nothing more than a fuzzily defined and artificially constructed niche of the general process by which humans construct theory, predict outcomes, make decisions, and direct their actions. Narrative construction of theory in a world that is not intentionally deceptive enables prediction that is useful within knowable limits. For example, the weather is not intentionally deceptive though it is complex. So with theory we can, within some limits, make useful weather predictions.
But economic theory wants to put forth theory regarding some “natural laws” governing human transactions in which the actors are intentionally deceptive. This doesn’t mean that they are necessarily devious. Actors in economic transactions are by necessity, self-deceived as well. How much is the house I am selling worth? How much is the house I am buying worth? Neither party is capable of assigning a true or rational value. Both parties are self-deceived and both are likely, in trying to maximize their benefit in a transaction, to be intentionally deceptive. Now add in a real estate broker, a mortgage lender, your neighbors, and other buyers in the area, and you have fine mess of lies and deceptions. In the completion of the transaction, we can only say the the real value is reflected in the final price, whatever it might be. A rose is a rose.
The story of the housing bubble is one example of a story that was propagated throughout our society by intentional actors immersed in deception. It was just another gold rush story.
So the whole process involves the stories we tell ourselves and one another. If you want to predict the ebb a flow of market behavior, follow the stories that are being propagated. Look for those stories that gain sway among populations. This is how advertising works, for example. It attempts to propagate story and deception is principle #1.
Refreshment or Global Warming?
How much is a bottle of water worth? The bottle cost more than the contents. The contents is readily available at a ridiculously low price. Tell me a story and I’ll tell you what people will pay. Convenience? Taste? Health? Looking good? Because everyone else is doing it? Because the money in my pocket is weighing me down?
Give me a break folks!. You don’t need neuroimaging to dope out a con game. The losses to society in terms or resources wasted and wealth squandered cannot be calculated. When was the last time you forked out hard earned cash for a plastic pint of H2O?
There’s not much to be found in neuronal synapses firing, supply and demand calculations, or rational market psychology. Decisions are made on the basis of beliefs that people come to by way of stories about how the world works. The weather is what it is. It has no deceptive intentions. But in the case of economic transactions, the stories people tell are filled with lies and deception. Even the economists cited in the SA article have some intentions and finding what is useful to people in general, has very little to do with their intentions.
Use a brain scanner, go to jail.
UPDATE:
See the “Wired Science” article ” Scanning Dead Salmon in MRI Machine Highlights Risk of Red Herrings” for more on the black art of brain scanning. http://www.wired.com/wiredscience/2009/09/fmrisalmon/
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- Were they ever “on track”? ↩
See the “Wired Science” article ” Scanning Dead Salmon in fMRI Machine Highlights Risk of Red Herrings” for more on the black art of brain scanning.
http://www.wired.com/wiredscience/2009/09/fmrisalmon/