Daniel Little — The place for thick theories of the actor in philosophy

The neoclassical foundational assumption of rational maximization and Buchanan's rational choice theory are "thin" theories of the actor. As a result the models created on the basis of such assumptions are simplifications. The questions is whether they are oversimplifications. That depends on the case. Such assumptions may apply generally in certain simple cases but not to all. Moreover, the assumption of methodological individualism on which microfoundations depends is similarly limited. These assumptions don't scale owing to social embeddedness and historical, cultural and institutional influence. Attempting to scale them beyond their limits results in the the fallacy of composition, that is, incorrectly assuming that a whole is the sum of its parts when the relationship of the parts supervenes.

Understanding Society
The place for thick theories of the actor in philosophy
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Scientists Discover What Economists Haven’t Found: Humans — David S. Wilson interviews Joseph Henrich

Ha ha!

…in our work we’ve tried to test some of the basic predictions made by the Homo economics model using some simple tools from behavioral economics applied across a diverse swath of human societies. Not only do we find that the Homo economicuspredictions fail in every society (24 societies, multiple communities per society), but instructively, we find that it fails in different ways in different societies. Nevertheless, after our paper “In search of Homo economicus” in 2001 in the American Economic Review, we continued to search for him. Eventually, we did find him. He turned out to be a chimpanzee. The canonical predictions of the Homo economicus model have proved remarkably successful in predicting chimpanzee behavior in simple experiments. So, all theoretical work was not wasted, it was just applied to the wrong species.…

In fairness to economists, modeling requires simplification. However, if assumptions are too restrictive, then the models they generate will be too simplistic to yield useful or reliable information. The question in economics is which models are useful and reliable based on quite restrictive assumptions about economic agents.

JH: The central idea that the book follows through is that human cultural learning gives rise to a system of cumulative cultural evolution that, over generations, gradually produces increasingly complex tools, technologies, bodies of know-how, communication systems and institutions. This is effectively a second system of inheritance that has been interacting with our genetic inheritance for over 1 million years. Consequently, understanding humans from an evolutionary perspective requires considering the interaction between these two inheritance systems. The book is built around a series of examples. I use examples of how our anatomy, physiology, and psychology have evolved genetically in response to culturally constructed practices, like fire and cooking, and institutions such as those related to marriage and kinship. 

One central idea that might be of interest to economists is the notion of the collective brain. The process of cumulative cultural evolution that arises from the specifics of how individuals adaptively learn from other members of their social groups means that our ability to produce increasingly complex tools technologies and know-how depend on the size and interconnectedness of a population, over time. This means that innovation, in part, depends on the flow of information among a large population of minds. 

I also make the point that many of our cognitive abilities that we may think of as innate are actually bootstrapped up via cultural evolution from much simpler and less impressive cognitive abilities. Cumulative cultural evolution produces things like numerical systems, spatial reference systems, pulleys, levers, elastically stored energy and complex languages Without these, we’re much less impressive.…

Homo economicus is too restrictive. What to do?

I think the major problem with moving away from the Homo economicus model lay in what to add to the model. The economists I know are nervous about moving away from this canonical model because they worry that it opens the door to the willy-nilly adding of different preferences to fit the data. What the field needs is a disciplined way of theorizing and testing preferences (or irrational beliefs) that can then be added to the model.

This is what I think a fully-fledged evolutionary approach can add to economics — theory that endogenizes beliefs and preferences within a cultural and genetic evolutionary dynamic. Economists can keep all that powerful utility maximizing machinery that they love but it has to be embedded the larger evolutionary framework.

I might add here that Ludwig Wittgenstein's later work showed how language acquisition and use is embedded in world views that provide the logical frameworks for language use by connecting symbols with context through behavior. For instance, pointing is a behavior but the logic of pointing as an indication is logical rather than behavior. This connection is a learned response.

Since this framework and its logic is embedded in language and acquired through learning a language, it goes largely unnoticed and is very difficult to disentangle even when noticed.

Michael Polanyi, the similarly brilliant brother of Karl, author of the The Great Transformation, also called attention to what he called "tacit knowledge" in Personal Knowledge.

The term “tacit knowing” or “tacit knowledge” was first introduced into philosophy by Michael Polanyi in 1958 in his magnum opus Personal Knowledge. He famously summarizes the idea in his later work The Tacit Dimension with the assertion that “we can know more than we can tell.”.[1] He states not only that there is knowledge that cannot be adequately articulated by verbal means, but also that all knowledge is rooted in tacit knowledge in the strong sense of that term.

Tacit knowledge can be defined as skills, ideas and experiences that people have in their minds and are, therefore, difficult to access because it is often not codified and may not necessarily be easily expressed (Chugh, 2015).[2] With tacit knowledge, people are not often aware of the knowledge they possess or how it can be valuable to others. Effective transfer of tacit knowledge generally requires extensive personal contact, regular interaction[3] and trust. This kind of knowledge can only be revealed through practice in a particular context and transmitted through social networks.[4] To some extent it is "captured" when the knowledge holder joins a network or a community of practice.[3]. — Wikipedia

This sort of knowledge is not "natural" in the sense of innate but rather is acquired through experience, specifically socialization, education, and enculturation.

Why is this important? Because the naive assumption is that human minds are mirrors of reality that reflect reality in the same way for all owing to commonly shared physiology. This leads to the incorrect assumption that there natural laws governing the social world in a way similar to the way that "laws of nature" operate in natural science.

Evonomics
Scientists Discover What Economists Haven’t Found: Humans

David S. Wilson, SUNY Distinguished Professor of Biology and Anthropology at Binghamton University and Arne Næss Chair in Global Justice and the Environment at the University of Oslo interviews Joseph Henrich, Professor, Department of Human Evolutionary Biology, Harvard University

Daniel Little — How professionals think

The topic of how actors arrive at their choices and behavior has come up a number of times here. The rational choice model has been considered (link), and other, more pragmatist approaches to agency have been considered as well (link). Finally, a number of posts have considered the idea of character as a key determinant of action (link). 

A team of distinguished experimental economists have recently provided a different perspective from any of these on the subject of agency and action. Alain Cohn, Ernst Fehr, and Michel André Maréchal recently published a provocative piece in Nature that appears to show that a certain segment of white-collar professionals (bankers) make very different decisions about their actions depending on the “frame” within which they deliberate (link). If they are thinking within the everyday frame of personal life and leisure, their actions are as honest as anyone else’s. But if they are prompted to think within the frame of their professional environment, their actions become substantially less honest. That professional environment is the large international bank.… 

This is a striking set of findings for a number of reasons. First, it strongly suggests that there are strong markers and incentives within the social environment of the bank that lead its employees to behave in dishonest ways. There is something about working in and around a financial institution that appears to provoke dishonesty. This sounds like a "culture of workplace" kind of effect. It suggests perhaps that bankers are acculturated over an extended period of experience to possess traits of character and behavior that lead them to behave dishonestly.

But second, the data seem to refute the "culture and character" interpretation. The same set of experiments supports the finding that when these same individuals approach the coin-tossing task with a mental framework oriented towards everyday personal life, their choices revert to the generally honest behavior of the broader population. In other words, these findings do not support the idea that banking either recruits or creates dishonest people. Rather, the findings seem to imply that banking encourages dishonestbehavior within the specific framework of banking business and only while the workplace signals are salient.

Bill Black calls it a criminogenic environment. It's actually well known that institutional culture is highly influential on individual behavior, and that the culture is established by the leadership in that subordinate imitate superiors, regardless of whether this takes place intentionally or not. The buck stops in the corner office.

Understanding Society
How professionals think
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Daniel Little — Institutional logics -- actors within institutions

More reasons that the notion of a representative economic agent (homo economicus) is bonkers from the perspective of sociology. Agents behaviors are at least influenced by networks of institutions and are in some cases determined by those institutions.

Understanding Society
Institutional logics -- actors within institutionsDaniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor