In this post I want to present a secular example of epistemic humility. As with the religious example, I hope that this one will also provide some intrinsically interesting ideas. I also plan on reusing these ideas in the next couple of posts.
Like my first example, the second highlights the fertility that arises from knowingly maintaining contradictory views. In this case the conflict is between the highly stylized model of human behavior used by economists (homo economicus or the rational agent) and real, live human beings.
It was John Stuart Mill and Adam Smith who put homo economicus through an early beta stage, but it was the generation of economists writing in the early 20th century who created version 1.0 of this model by rendering it mathematically precise. They did this because economics was suffering at the time, and perhaps suffers acutely to this day, from physics envy.
The core assumption of the model held that individuals are constantly optimizing a mathematically tractable utility function that converts things like the amount of goods consumed (good) or the amount of hours worked (bad) given constraints (income) into a nebulous concept known as “utility”.
Predicting behavior (and thus doing useful things like solving for market-clearing prices) was therefore a matter of applying optimization techniques from physics to the economic models. In short: take derivative, set equal to 0. (There really should be a funny comic about that, but I can’t find one.) Presto! Human behavior reduced to calculus.
Except that of course that it doesn’t reduce to calculus, and quite a lot of criticism is leveled at economists for this reason. In truth, however, no one is more acutely aware than economists of the distinctions between the idealized model and flesh and blood humans. This key factor is the reason I believe the example is properly one of epistemic humility: economists recognize that their model is flawed. They know it’s wrong. They neither deny the problems and assert the model’s literal truth, nor do they superficially accept the criticism while carrying on as though nothing had changed, thus rendering their tacit acknowledgment a de facto denial. The question, of course, is if they know the model is wrong why do they stick with it? Why do they pretend that a broken model works when it manifestly doesn’t?
The primary reason is that the alternative, while true, is technically useless. To say “humans are irrational” is not actually to solve any problem, but merely to give up and throw one’s hands in the air. (Thus, we call into question the correspondence theory of truth: Maybe the usefulness of a belief is more important than the degree to which it coincides with objective reality.)
Which is not to say that the fundamentals of the model didn’t change at all. The most important shift was subtle: modern mircoeconomic theory states that decisions are rationalizable rather than maintaining the rationality of the underlying cognitive processes. This move (e.g.toward revealed preference theory) eschewed psychological explanations of human behavior for the objectivity of empirical observation. This neat replacement of the philosophical foundation of the model left it functionally unchanged: the economists got to keep using all their old tools and tricks, but they were not content to ignore the model’s shortcomings.
Instead, efforts to patch the model or address specific deviations of the model from real life have played a large role in the creation of a new sub-discipline: behavioral economics (see also: neuroeconomics). Here’s a short list of new insights economists have derived as a result of trying to improve rather than abandon their models:
- bounded rationality – This is a model of the rational agent that includes lack of information and lack of deliberative resources due to time and/or effort.
- rational irrationality – This model, originally devised to explain apparently irrational voting behavior, incorporates agents who have preferences over their own beliefs. It thus opens the door to incorporating other complex irrational behavior such as symbolic beliefs.
- hyperbolic discounting – This model captures the observation that our valuation of future rewards falls rapidly for short time horizons but very gradually for long time horizons. Consider this example: many people would rather receive $1 now rather than $3 in three days, but almost all would prefer to receive $3 given in a year and three days rather than $1 given in just one year. In both cases, we’re exchanging $1 for $3 just two days later, but our choice will flip based on when the transaction takes place.
As with the previous example, a willingness to stick with a contradiction led to new insights, but though partially mitigated, the conflict remains. It probably always will. There may come a point where the exercise of sticking with a broken model no longer makes sense, but (and this is a key point) only if it can be abandoned in favor of some alternative that is superior. Falsehood, in and of itself, is no reason to discard a model.
And that is the first key insight I would like to highlight for later use: the necessity of pragmatic theories of truth. To a Mormon, who believes not only that God’s thoughts are not our thoughts, but also in a kind of grand unified theory in which all truths can be circumscribed into one eternal whole, we must be acutely aware of the futility of trying to apprehend objective truths. It is an article of faith that all our models are wrong. This presents a dire problem (as an example) for our testimony meetings. How can a statement like “I know the Church is true” possibly correspond reliably to some objective reality when the content of virtually all the words in the statement will shift dramatically over the course of a lifetime?
I believe the Church is true today. I believed it was true when I was 21 and when I was 16, but I meant very, very different things by that declaration at each point along the road. Therefore, either my testimony was false at age 16 and 21 (and so I have every reason to believe that it is false today as well), or the correspondence theory of truth is insufficient. We have to choose between a simplistic view of truth and our testimonies.
The second insight I want to emphasize is the priority given once again to deed over word. Economic insights into human individuals and communities are derived primarily through considering the functional consequences of behavior (rather than the stated intentions) and the systemic incentives (rather than the perceived motivations). This is because we’re simply terrible at understanding our own beliefs. We think we believe things which our actions demonstrate that we do not authentically believe (e.g. symbolic beliefs), and we often act according to beliefs we don’t think we have. I used the example of a person who was investing in long-term retirement savings while anticipating the imminent return of Jesus Christ to illustrate the former in the last piece. A recent psychology paper serves as a reminder of how bad the latter can be:
[S]cience faculty from research-intensive universities rated the application materials of a student — who was randomly assigned either a male or female name — for a laboratory manager position. Faculty participants rated the male applicant as significantly more competent and hireable than the (identical) female applicant. These participants also selected a higher starting salary and offered more career mentoring to the male applicant. The gender of the faculty participants did not affect responses, such that female and male faculty were equally likely to exhibit bias against the female student.
I’m sure that these researchers would have strenuously and honestly denied any such gender-based prejudice, but they were wrong.
We absolutely cannot rely on our self-perception to understand ourselves, and so it makes sense–whenever possible–to conduct examinations based not on what people perceive their motives and intentions to be, but on what systemic incentives actually exist and what the consequences of their behaviors in response to those incentives actually are.
In the next couple of pieces, I’m going to start applying these insights to our society as it exists today. I hope to illuminate both the promise epistemic humility holds for society and the dire perils we face by embracing its antithesis.