I am an avid news reader and follower of current events. It is part of my training in issues and crisis management: watch what is going on, consider implications, and create strategy. Today, I am sparked by an article in the Guardian regarding too much choice. I have to say that I am concerned.
The science of behavioral economics is sound (and fascinating – it will be a recurring topic on this blog). Humans are influenced by a variety of factors above and beyond economic gain and personal benefit. I have conducted experiments myself that have shown how we are not quite objectively rational in our decision making. However, while the science has pointed out that we are not entirely homo economicus, we are not entirely hopeless and in need of other people to take care of us. There are other scientific studies and perspectives that provide a framework where new ideas enter a market, and where people either accept or reject the innovation based upon many different criteria.
While few can argue against the science and evidence, we can have quite a spirited debate on the implications and what can be done about it. That debate is not based on social science, but on politics and rhetoric. The arguments (as I have seen) seem to be that, as people are not good decision makers, we should then put the decision making into the hands of other humans (note: who are just as susceptible to behavioral economics as we are). Somehow, we are expected to believe that the smart other people will make better decisions than we can. These smart people just need to give the less smart people a bit of a Nudge. They can do it through social engineering, government actions, policies, and laws.
Human behavior will always be as it is. When human behavior is constrained, it is through compliance with the wishes of others (through some form of entitlement or punishment for non-compliance). There seems to be an ongoing narrative opposite to what we are advocating for here at Impact Capitalist. We support free market capitalism as having the best opportunity for global impact. We believe in free choice for individuals. We do not feel that others (including government actors) can make a better choice for us. We believe that business owners with a mindset toward impact and profit, operating in a free-market, can create a better society than can government officials.
To impact and profit through free choice.