Friday, May 8, 2015

FUDGE: False consciousness, rational choice, analytical Marxism and behavioral economics

One of the advantages of growing older is that you can remember intellectual fashions that have gone out of style but whose outlines are clearly discernible in the latest craze.

A long, long, long time ago -- the late 1970s and early 1980s -- critical theory, the Frankfurt School and Georg Lukacs was all the rage. An English translation of Lukacs's History and Class Consciousness was published in 1971 and reached the pinnacle of its celebrity by the end of the decade. Some people even read it (disclaimer: I did). The notion of false consciousness seemed to leftist university students to explain why The Proletariat hadn't brought about The Revolution.

I simplify, of course.

Then along came Analytical Marxism to bore and confound the academic left and Post-Modernism to entertain it (and bore and confound everyone else). Workers didn't suffer from false consciousness, after all. It was in their best interest to support capitalism and anyway they constructed a multitude of their own identities.
When workers pursue strategies that lead to a compromise, the state does what appears necessary to reproduce capitalism because this is the choice of the workers as well as the capitalists. The organization of the state as an institution and the policies pursued by this institution constitute an expression of a specific class compromise. ("The Structure of Class Conflict in Democratic Capitalist Societies," A. Przeworski and M. Wallerstein, 1982 [corrected reference])
Look, over there! It's Madonna, subverting the cultural codes!

Meanwhile, at around the same time false consciousness was been hounded out of respectable discourse, it was being revealed that "the most basic rules of the theory [of rational choice] are commonly violated by decision makers." Tversky and Kahneman argued that:
the deviations of actual behavior from the normative model are too widespread to be ignored, too systematic to be dismissed as random error, and too fundamental to be accommodated by relaxing the normative system.
So workers allegedly rationally calculate that capitalism is good for them even though they are probably incapable of consistently choosing between two identical pairs of options. How does this work, again?

I'm going to take a short cut here and quote extensively from a 1981 article, "Cognitive Psychology and Ideology," by Edward Sampson. In part, I'm doing this to save me the trouble of summarizing the argument. But also I want to emphasize the not inconsiderable detail that this argument was "already out there" and has been for 34 years.
It is clear from the treatment that Lukacs gives to reification, and from the subsequent critical analyses which Gergen and I have offered, that psychological reification tends to serve primarily ideological functions.Reifications are simultaneously an accurate portrait of existing social reality and a false consciousness, serving the existing framework of values and interests. Psychological reifications clothe existing social arrangements in terms of basic and inevitable characteristics of individual psychological functioning; this inadvertently authenticates the status quo, but now in a disguised psychological costume. What has been mediated by a sociohistorical process—the forms and contents of human consciousness and of individual psychological experience—is treated as though it were an "in-itself," a reality independent of these very origins. 
[Tversky and Kahneman] clearly adopt the forms of statistical and scientific analysis as the correct standard of judgment against which they measure the judgmental principles followed by lay people and even by professional clinicians and counselors. Tversky and Kahneman view most adults' intuitive predictions to be in error when compared with the true standard of excellence, statistical and scientific thought itself. They refer to these error-ridden everyday forms as "illusions" and express surprise that after a lifetime of experience most people still fail to "experience such fundamental statistical rules as regression toward the mean, or the effect of sample size on sampling variability," and so continue to make error-filled predictions.

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