Robo economicus

A common criticism of economists is that their theories work if people behave like perfectly rational preference-maximisers but not if they behave like people. My understanding is that this criticism is a load of baloney, because economists are well aware that people don’t always behave as homo economicus would, it’s still a useful idealisation with genuine predictive and explanatory power, and economists study how much and in what ways the idealisation differs from the reality. Perhaps I’m wrong about this. I doubt it though, because if the criticism was justified then the rational thing would be to write a paper pointing it out and scoop the Nobel prize, and nobody’s done that.

This said, economists do seem to be better at explaining things than they are at predicting them, and maybe if people behaved more like the idealisations then economic behaviour would be easier to predict. My suggestion is that we make a lot of artificially intelligent robots that really do behave like that, give them a bunch of money and release them into society.

Part of the beauty of this is that economies would become more predictable. The other part is that we could programme the robots to have the preferences we have but aren’t rational enough to maximise even when we have the means to do so. If we want more hospitals built, we could entrust their construction to corruptible, fallible humans, or to incorruptible, infallible, single-minded robots. The hospitals would be built as efficiently as possible, and as an added bonus the robot would be delighted.

I’ve long wondered why the government can’t stimulate the economy by pumping a load of money into international development, so the world gets developed by the invisible hands of the profit motive instead of by the sporadic largesse of the notoriously self-obsessed, myopic and capricious general public. I’m sure there’s a reason we can’t do this, or we’d have done it. But even if governments can’t create a market for that sort of thing, I don’t see why a rampaging rabble of rich rational robots couldn’t. It that pays the piper calls the tune.