Calculating the cost of human foibles.
- By Elizabeth DickinsonElizabeth Dickinson is author of the Kindle Single Who Shot Ahmed? A Mystery Unravels in Bahrain's Botched Arab Spring, from which this excerpt was adapted. She is a former FP assistant managing editor.
Economists have suffered a collapse in credibility since the global financial crisis began. Faith in the efficiency of markets and the invisible hand is out; “behavioral economics,” which stresses that humans are fundamentally irrational actors, is in. We are blind to risk; we make decisions on a whim; we prefer consuming now over saving for later. Human fallibility seems to be the perfect explanation for an unfathomable crisis. Here’s how — after years of being considered a quaint subfield — behavioral economics has finally stolen the limelight.
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and a senior editor at The National Interest. Prior to Fletcher, he taught at the University of Chicago and the University of Colorado at Boulder. Drezner has received fellowships from the German Marshall Fund of the United States, the Council on Foreign Relations, and Harvard University. He has previously held positions with Civic Education Project, the RAND Corporation, and the Treasury Department.| Daniel W. Drezner |