Govern-Mentality: The Subjectification of Homo Economicus and Promulgation of Neoliberalism Through Behavioural Economics

Abstract

In recent decades, behavioural economics has progressively emerged as part of the zeitgeist of contemporary economic research and policy-making. At the conceptual level, behaviouralism utilises research from psychology to identify predictably recurring behavioural departures from neoclassical economics, demonstrate the importance of such deviations in diverse economic contexts, formalise these deviations through constructing novel models of economic behaviour and incorporate these models into a range of areas of social inquiry. Concomitantly, these theoretical foundations have regularly been cited as having significant political implications in providing the grounding for a post-neoliberal consensus built around the principles of ‘libertarian-paternalism’. In both respects, the tradition has justifiably been accorded increased attention in both academic and policy-making institutions. Yet, despite its evident theoretical advancements over neoclassical models of decision-making, this study argues that behavioural economics remains deeply-engrained in the corpus of neoclassical economics. Specifically, it argues that behavioural economics seeks to rework rather than reject neoclassical formulations of rationality as a means to extend the conceptual and normative reach of the latter. Rather than accepting the self-representation of the tradition as transcending the problematic presuppositions of Homo Economicus, the study utilises Foucauldean insights on epistemology and neoliberalism to demonstrate that behaviouralism adopts a normative stance in favour of this model both as an ideal for rational human behaviour and as a potentially realisable state-of-affairs. Behavioural economics retains Homo Economicus as the normative ideal for rational decision-making, in that it selectively deploys the insights of psychology to pathologise real-world decision-making as deviating from this archetype due to biases and heuristics. In turn, it advances policies to correct for such ‘anomalies’ and enable actors to behave as if they were operating according to the axioms of constrained optimisation. In effect, behaviouralism engages in the subjectification of Homo Economicus, through which it seeks to produce and accord authority to this subjectivity as the essential microfoundation for social and economic order through functioning markets. Concomitantly, this subjectification enables the tradition to serve as an apparatus of contemporary neoliberal governmentality, whereby it seeks to engender a certain economic subjectivity contingent on the existence of the market as a locus of veridiction. In particular, behaviouralism promulgates a broader economisation of the social terrain by fostering and legitimising increasing biopolitical management of individuals, interests and populations by the state to seek to correct for their deviations from Homo Economicus and ensure more efficacious conformity to market logics. Simultaneously, as demonstrated through a case-study of policy proposals and reports of experiments designed to test the application of behavioural principles in addressing rural poverty in the Global South, behaviouralism also renders complex matters of political economic policy-making as questions of bolstering individual rationality to buttress individual and social welfare. It thereby depoliticises extant institutions of neoliberal governmentality and the promulgation of biopolitical measures seeking to deepen an economistic logic across the social terrain, while also undermining contestation over alternative institutional and structural configurations. Rather than offering a fundamental challenge to neoclassical economics and neoliberalism, the political economy of behavioural economics is thus demonstrated to buttress the conceptual and political status quo.