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Toward a Non-Autistic Economy

Why is it so hard to get people to agree to stop killing each other? Maybe because our diplomats don't understand human nature.

New Zealander John Borrie heads the United Nations project "Disarmament as Humanitarian Action: Making Multilateral Negotiations Work." He says governments and central bankers make policy based on flawed assumptions about people and their economic decisions.

Borrie writes,

These days ..., economists more commonly couch their models and theories in terms of ‘bounded rationality’, recognizing that the availability of information and human capacity for rational decision-making are far less than perfect. The economist John Maynard Keynes himself observed in the 1930s that, "a large proportion of our positive activities depend on spontaneous optimism rather than on mathematical expectation."

You can see this in the way people play economic games, Borrie points out. In the Ultimatum Game, one person is given money that she can keep or choose to split with a partner. But, if the partner rejects the split, both get nothing. Most people split the money pretty evenly, assuming that the recipient would reject an unfair deal. And  most recipients will walk away with nothing, rather than letting the greedy donor profit-- even though $1 is better than nothing.

He goes on to discuss the "neuroeconomics" studies in which inhaling oxytocin made people behave more trustingly and cooperatively in economic exchanges. Borrie writes,

… the compound’s clear effect on human perceptions and behaviour during an investment game (as a result of some participants squirting oxytocin up their noses) was a bombshell. Who knew that a tendency to increase trust and cooperate could be triggered by biochemicals? Least of all diplomats themselves, beyond “the smell of the room” many of them sense in a negotiation.

Borrie's article ties in with one in the June 11, 2007, issue of The Nation. In "Hip Heterodoxy," Christopher Hayes, a senior editor at In These Times, writes about the battle for credibility of what's known as behavioral economics within traditional economics.

The dominant theory, the neoclassical approach, remains wedded to the idea that people and markets behave logically in ways that will maximize their own economic interests, leading to a stable marketplace with appropriate prices for goods and services. These theorists, Hayes writes, "fully embrace the logical extremes of a world of self-interested rational actors."

On the other hand, behavioral economists -- those espousing the heterodoxical theory that human nature isn't rational -- find real people to be "systematically biased in their calculations of risk, disposed to punish antisocial behavior, even at a cost to themselves."

According to Hayes, the idea that people doing business might be motivated by anything other than economic gain is downright heretical among academics.

Borrie seems to think that negotiators should use what neuroscience has uncovered primarily to make sure that they aren't being swayed off the rational course. He writes,

By uncovering the empirical underpinnings for some aspects of human behaviour that aren’t learned, or which aren’t obvious to our constrained perceptions, they can help multilateral negotiators recognize and compare their intuitions with their human capacity for rationality.

But he also says,

Successful diplomacy is a knife-edge balance between intuitive savvy and rational calculation. It’s easy to confuse one with the other. If multilateral negotiations are to become more effective – and they need to if the appalling record of disarmament and arms control diplomacy over the last decade is any guide – they’ll need to be open to new approaches from unorthodox quarters.

Such as being more, well, human? Being open to empathy and compassion? Recognizing the hopes, desires and needs of our fellows? Maybe so. Borrie goes on,

Central to the project’s approach is that multilateral disarmament be seen from the referent point of the security of the individual human being, as well as the traditional focus on the nation state. “Humanitarian” needs to encompass what it means in specific perceptual terms to be human in outlook and behaviour if we are to successfully alleviate the complex and almost intractable security problems of so many communities around the world torn apart by conflict.

We are hardwired to connect, in the words of the <a href="http://www.americanvalues.org/ExSumm-print.pdf">Commission on Children at Risk</a>: Our evolutionary heritage as cooperative breeders and highly social individuals makes it feel good to cooperate. This feel-good goes deeper than emotion. Oxytocin is tied into not only social interaction in our brains but also into the health of our bodies. We need to connect.

Even in business.

In his Nation piece, Hayes also talks about a 2000 protest among students at the Ecole Normale Superieure against what they called the "autistic economics" being taught in universities.

In their manifesto, the students demanded a pluralistic approach that would allow economists to actually become useful to society and individuals by explaining the real world we live in, instead of promulgating abstract theories. They said, "We do not accept this dogmatism. We want a pluralism of approaches, adapted to the complexity of the objects and to the uncertainty surrounding most of the big questions in economics (unemployment, inequalities, the place of financial markets, the advantages and disadvantages of free-trade, globalization, economic development, etc.)"

You can read the history of the Post-Autistic Economics Movement <a href="http://www.paecon.net/HistoryPAE.htm">here</a>.

It's telling that many scientists think that autism involves a breakdown in the oxytocin system. People with autistic spectrum disorder have difficulty feeling empathy for others. No one has watched them play the Ultimatum Game, but if they did, it's likely that intellectually average people with ASD would behave with superbly rational self-interest.

Suddenly, oxytocin seems central to economic endeavor. So, let's posit an oxytocin-centric economics.

Would this be a world where the goal of business would be to profit by solving the problems of society? By fulfilling people's needs? Would universal health care suddenly seem important? Would a different kind of person be drawn to the business world? Would this be a revolution?