Is our education system biased against kids who don't give a shit?

In The Know: Are Tests Biased Against Students Who Don't Give A Shit?

Kids and meds

Check out Sarah Silverman talking about being prescribed 16 Xanax a day by her therapist.

SEAL: 'we get a little crazy'

I've been looking into a curriculum subject introduced by New Labour in 2003, called Social and Emotional Aspects of Learning (SEAL). It began as a voluntary primary school subject, and in 2007 was also made a voluntary secondary school subject. Over 90% of primary schools and over 60% of secondary schools now teach it.

SEAL teaches five emotional competencies: self-awareness, managing feelings, motivation, empathy and social skills. It's the biggest example of the new 'politics of wellbeing', and of the new confidence governments have in managing their citizens' emotional development.

What I've discovered, to my surprise, is that this new national subject was almost entirely based on one book - Daniel Goleman's Emotional Intelligence (EI).

Goleman, then a journalist at the New York Times, wrote EI in 1996. The book was a huge hit and spent a year and a half in the New York Times best-seller list. It captured the 1990s fascination with the emotions, the role they play, and how we can manage them.

Cut to Southampton, in 1997, and Peter Sharp, the local authority's chief educational psychologist, read EI and was so "inspired" by it that he and Southampton's chief schools inspector decided that "emotional literacy should be an equal priority with literacy and numeracy for all children in Southampton". The book must have made quite an impression.

Nudging the Issue

News here in the UK that the prime minister, David Cameron, has established a 'behavioural insight' team, led by the policy advisor David Halpern, to find ways to implement the ideas of behavioural psychologist Richard Thaler, who is also working with the unit.

Thaler is, together with Cass Sunstein, the author of Nudge, a study of ways people can be manipulated to behave in more socially harmonious and beneficial ways through small, fun interventions. Putting a picture of a fly on a urinal, for example, nudges people to pee more in the urinal, and less on the floor. Creating bins that make a funny noise when you drop things into them encourages people to put more rubbish into bins.

And so on!

There are other, more far-reaching ways you can use behavioural psychology to affect public policy. For example, if you present a policy decision to citizens, you could either have them tick a box to sign up to it, or tick a box to opt out of it. If you choose the latter option, they are more likely to sign up to it, out of inertia. This has been used to nudge people to choosing voluntary pension contributions.

Thaler and Sunstein call this sort of social manipulation 'libertarian paternalism'. People are still free to choose how to live. But, knowing that people often make bad decisions because of their cognitive biases, governments and companies should structure the choices they present people so that they are nudged to make choices in their long-term optimal interest.

There are two ripostes to this approach:

1) It doesn't really work on anything significant, and getting people to pee in urinals, while valuable, is not deeply socially transformative.

2) Governments should not try to manipulate the poor decision-making processes of the masses, even if it is for 'good' aims. Who is to say the aims are good?

The same sort of manipulation techniques could just as easily be used by corporations for their own short-term profit - just as tobacco companies used the psychological techniques of Edward Bernays, nephew of Freud and the father of PR (and arguably the grand-father of nudge), to sell their cigarettes. It could also easily be used by a militaristic or fascistic government to nudge the people to war (see the video below).

The alternative approach to Nudge has been called Think. It's a bit more old fashioned - you try to explain things to people to allow them to make a more free, informed and rational decision. Crazy idea!

And a middle ground between Nudge and Think has been suggested by the RSA, called Steer: you nudge people towards decisions, but you explain how you are doing it. The Derren Brown approach to politics, in other words - 'I just tricked you, but here's how I did it'.

Do we really need the government to spend our money on this? Is the Tory Party's big idea really to manipulate our poor decision-making processes? Do we rationally agree to join the Big Society, or we're simply nudged into it?

'You are not a beautiful, unique snowflake'

'You are not a beautiful, unique snow-flake...You are not your bank account...You are not the clothes you wear...You are not your grande latte...You are not your fucking khakis...' Tyler Durden

The philosophy of communitarianism involves a rejection of the Romantic cult of the self, and particularly of the values of the Post-War 'me generation', and its abandonment of traditional ideas of community and the common good.

The key book for modern communitarianism's engagement with and rejection of the Romantic cult of the self is Charles Taylor's The Ethics of Authenticity.

Communitarianism rejects Romanticism's cult of the self, its idea of the self as a unique snow-flake, by suggesting instead that the self can only be understood in a social and communal framework.

Communitarians like Alasdair MacIntyre often go back to Aristotle, and his definition of man as a social and political animal - MacIntyre suggests it would have been impossible for the ancient Greeks to imagine the self separate from their community.

We need, the communitarians suggest, to move beyond the Romantic cult of the self, to move beyond the 1960s' obsession with 'finding myself', and to return to the idea of serving something higher than the self: the community, the common good, and so on.

Quite often, communitarians argue that the cult of personal freedom ('I do whatever I want to do, who are you to tell me different?') is mistaken, because humans have a common nature, and you need to understand how this nature works, understand its impersonal laws, in order to achieve happiness. You can do whatever you want, but to be truly fulfilled, you have to understand your nature as a human, and how to develop and fulfil that nature. So all models of living are not equally good.

Given that, some communitarians argue, politics should be built on the models of the Good Life that 'fit' our biological nature. I call this 'natural communitarianism'. Alasdair MacIntyre is an example of it, so is the RSA's Matthew Taylor.

I think we are at an interesting moment in history where the Romantic cult of the self turns into the Communitarian cult of the common good. It is not that the latter rejects and replaces the former, it is that the former turns into the latter.

The search for one's true self leads from the personal to the impersonal. Eventually, after staring at your navel for long enough, you get bored and look for something beyond the personal self, for something transcendent.

A good example of this is Rousseau (pictured above), who was the father of the narcissistic cult of the self in modern culture. But he ended up, in The Social Contract, advocating a form of civic engagement so total that the personal self would be entirely obliterated by the public self, or the 'citizen'.

That's an extreme example of the shift from the cult of the personal self to the cult of the impersonal self, but there are modern counterparts.

Cognitive behavioural therapy and Positive Psychology grew out of the world of self-help. That's to say, they gained a lot of their popularity because they promise to make the self 'happy'. In that sense, they very much appeal to the 1960s 'me generation', and are themselves products of that generation.

But they discover that the way to achieve happiness is not to 'do what you feel like' but instead to follow what are, on examination, impersonal laws or guidelines that 'fit' with our rational nature.

Both CBT and Positive Psychology are based on ancient Greek psychology, on the idea in Socrates and his followers that humans have a rational nature, that we can use our rationality to know ourselves, to rationally scrutinize our beliefs, and to replace irrational beliefs with more rational beliefs.

In other words, there is a sort of 'natural law' to our minds, a natural rationality, and becoming happy and fulfilled people involves understanding and following this natural law.

Ancient philosophy was very much based around the idea that finding fulfilment, finding and fulfilling your 'real nature', involves obeying a set of impersonal laws and practices. It involves a moving from the personal self to the impersonal self, which is God, or the Logos.

The search for the personal self becomes, ultimately, an understanding of the impersonality of the self: an understanding that the self is not this cognitive habit, or that cognitive habit, but is instead the reason and awareness that is capable of considering each habit and choosing it.

It is the light of reason or awareness that shines through the lenses of different thoughts and beliefs. Not the belief itself, but the awareness of that belief. This awareness is not 'you'. It just is. There is no stable, permanent entity called 'you', only the light of awareness, shining on your transient thoughts and habits, like a torch shining on a river at night.

One can compare this to the idea in Hinduism that the deepest Self is impersonal - it is God. the search for the self leads to the Self.

The question for modern communitarianism is: can one order society politically, so that it cultivates the impersonal self, rather than merely providing a legal space for our private cultivation of the personal self?

Rousseau tried to create a society that would engineer the impersonal self of the 'citizen'. It ended up being a totalitarian society. Plato likewise tried to create a society that would cultivate our 'natural', impersonal self. It also ended up a model of a totalitarian society.

The movement from the Romantic cult of the personal self to the Communitarian cult of the impersonal self and the common good is a dangerous moment in history.

Creativity: the opposite of flow?

Here's an interesting study by Harvard: it suggests that one aspect of creativity is a poor ability to disregard random information from your environment. Your higher intelligence or awareness means your attention is constantly being pulled around by external stimuli, but this makes you more creative than less sensitive people - because you see things they don't, process more information than them, and are more alive to your environment.

But this is also why creative people are, perhaps, more likely to go mad: they can't always handle all the information they are being swamped with:

"Scientists have wondered for a long time why madness and creativity seem linked, particularly in artists, musicians, and writers," notes Shelley Carson, a Harvard psychologist. "Our research results indicate that low levels of latent inhibition and exceptional flexibility in thought predispose people to mental illness under some conditions and to creative accomplishments under others."

Carson, Jordan Peterson (now at the University of Toronto), and Daniel Higgins did experiments to find out what these conditions might be.

They put 182 Harvard graduate and undergraduate students through a series of tests involving listening to repeated strings of nonsense syllables, hearing background noise, and watching yellow lights on a video screen. (The researchers do not want to reveal details of how latent inhibition was scored because such tests are still going on with other subjects.)

The students also filled out questionnaires about their creative achievements on a new type of form developed by Carson, and they took standard intelligence tests. When all the scores and test results were compared, the most creative students had lower scores for latent inhibition than the less creative.

Some students who scored unusually high in creative achievement were seven times more likely to have low scores for latent inhibition. These low scorers also had high IQs.

"Getting swamped by new information that you have difficulty handling may predispose you to a mental disorder," Carson says. "But if you have high intelligence and a good working memory, you are more likely to be able to combine bits of new information in creative ways."

This is a very different model of creativity to the rather influential theory of 'flow' put forward by Mihaly Csikszentmiyhalyi: that highly creative people are able to achieve high states of flow, or complete absorption in what they're doing so that they lose track of time and space.

Perhaps creativity is actually the opposite of complete absorption. Perhaps it is the ability to open your mind up to your environment and let it be invaded by it, like Coleridge's Aeolian Harp...

Or perhaps creativity is both the experience of opening up and absorbing all kinds of stimuli, and then the experience of focusing in and creating something from all that information. It is an opening up, and then a narrowing in.

A great example of this process, I think, is TS Eliot's The Wasteland: Eliot opens his mind up to all the fragments and confusing elements of his cultural environment, emptying his self out and becoming passively invaded, or assaulted, by a barrage of cultural stimuli, and then asserting his attention and will to forge these elements into a new order.

Creativity is the process by which we bring order out of the chaos of information that swamps us.

Drawing over-hasty conclusions

Here's a new animation in which Matthew Taylor, former head of the Institute of Public Policy Research and now president of the RSA, sets out what he wants the Royal Society to do. He's clearly very interested in the politics of well-being, and in what moral and political insights we can draw from new research in psychology and neuroscience. But he may be over-hasty in the policy conclusions that he draws.



Taylor refers in the talk to "powerful new insights" from neuroscience, anthropology and psychology, particularly the idea, in the work of social and behavioural psychologists like John Bargh and Jonathan Haidt, that we are mainly automatic, irrational creatures, and we need to be aware of the limits of our rationality and free will, in order to become more self-aware and responsible people. (If you read the excellent www.edge.org, you'll be familiar with a lot of this research.)

Taylor argues that this research provides a scientific 'evidence base' that takes us beyond individualism, and towards a more social and communitarian model of politics. In this, he is in the same camp as New Left thinkers like Richard Layard and Oliver James, who have tried to use insights from psychology to criticise neo-liberal individualism and justify a more social-communitarian model of society.

The main problem with this 'natural communitarianism' is that Taylor and the RSA are moving too rapidly from an 'is' to an 'ought', when in fact the same scientific research can be used to justify quite different policy approaches.

Ancient philosophy, modern technology

I'm writing a piece for Psychologies Magazine on iPhone apps and their use in the quest for well-being, enlightenment and all that jazz. It's provisionally entitled 'The Pursuit of Appiness' (groan).

It's making me excited, once again, about the possibilities that arise when ancient philosophy meets modern technology.

Ancient philosophers insisted that what they were teaching was a techne - a skill, a technology. Michel Foucault, when he came to study the spiritual exercises of ancient philosophy at the end of his life, called them the 'technologies' of self-mastery.

Today, I think there's great potential for the fusion of modern digital technologies with ancient spiritual technologies. We've already seen that happen, over the last 15 years or so, with the internet, which has allowed the rapid spread of, for example, Buddhist practices like mindfulness.

In a smaller way, it has also played a role in the rather more humble revival in ancient Greek philosophy, through websites like NewStoa.com.

I would love to work on taking this to the next step - on developing smart books, and applications for smart phones and iPads, that bring the ideas and the technologies of ancient philosophy to the modern reader, in a dynamic, interactive and intelligent way.

I still dream of producing a smart book, an e-book, that introduces the reader to ancient philosophy in the dynamic and intelligent way that Neal Stephenson dreamed of in his book, The Diamond Age, which tells of a self-help book that dynamically responds to its reader.

A self-help book that incorporates text, photo, flash, video, downloadable MP3s, apps, questionnaires and personality tests, regular new downloadable content, and readers' fora. A 21st century Book of Kells. That's what I dream of.

Curb Your Enthusiasm

This is a (slightly adapted) piece I wrote for the Wall Street Journal on behavioural economics. I added a bit of stuff on ancient philosophy which readers of this blog might be interested in.

The Stoic philosopher Epictetus told his students that the wise man “keeps guard against himself as his own enemy, and one lying in wait for him”. Our own selves are so foolish, unconscious and over-emotional, he warned, that anytime you feel a strong impulse to do something you should “guard yourself...against being carried away by it”.

This is a view of human folly shared by the rather younger field of behavioural economics. As James Montier, behavioural economist and member of GMO’s asset allocation team, puts it: “Your own worst enemy when it comes to investment is yourself.”

Behavioural economics has existed as a field since at least the 1970s, but it rose to prominence after the bursting of the dot.com bubble in 2000, particularly when Daniel Kahneman, one of its leading thinkers, was awarded the Noble Prize for Economics in 2002.
It has become even more ‘hot’ since the Credit Crunch once again exposed how irrational many of our investment decisions are. Many banks, funds and asset managers now have in-house behavioural economics specialists, and quant teams who claim to run behavioural finance models.

The central idea of behavioural economics is that classical economics is based on the mistaken assumption that humans are perfectly rational calculators of their own utility. In fact, in the words of Dan Ariely, professor of behavioural economics at Duke University and the author of The Upside of Irrationality: “We are more like Homer Simpson.”

Our minds are capable of rationality, according to behavioural psychology, but most of the time they're on auto-pilot, driven by rapid, emotional and automatic responses.

Jim O’Shaughnessy, CEO of O’Shaughnessy Asset Management and a fan of behavioural economics, has long spoken of the need for investors to pursue a 'dispassionate' investing style. He says:Our rapid emotional response system - of fear, greed, hope, and so on - served humans well when we were struggling to survive on the Serengeti, but in the complex environment of the 21st century market, it leads many investors to do exactly the wrong thing at exactly the wrong time - to panic and sell when the market is bottoming out and to get greedy and buy when the market is peaking. Like the Stoics, behavioural psychologists believe many of the mistakes investors make come not from them being 'over-emotional', but from illogical thinking. We process information badly, which leads us to make bad decisions.

Like their cousins, the cognitive behavioural therapists, behavioural economists look for the typical mistakes - or ‘cognitive biases’ - that humans make when interpreting information and making decisions.

The list of such mistakes is endless. There is the confirmatory bias, whereby we seize on evidence that supports our beliefs, while ignoring evidence that conflicts with it. There is the anchoring bias, whereby we become emotionally attached to the price at which we buy an asset, and hold onto it in the hope it will one day rise above this price, even if it is clearly heading south.

There’s the authority bias, whereby we tend to believe information that comes from authoritative sources, like the Federal Reserve for example. There’s the attention bias, whereby investors tend to buy stocks that were recently mentioned in the news - regardless of whether the news was positive or negative.

There are many, many more such biases, which have been tested out and proven in laboratory and field experiments. So what practical help is the knowledge of these biases?
From a seller’s perspective, it can help to know how to appeal to these biases, in order to ‘nudge’ your client and sell your product. For example, humans are prone to the narrative fallacy - they tend to fit complex and confusing data into simple ‘stories’. That means investment bankers need to be story-tellers as much as maths experts.

If you’re a more honest fund manager or wealth advisor, you can use behavioural economics to better understand your client’s typical emotional responses, to try and tailor investment solutions that counter-act their biases.

Greg Davies, head of behavioural finance at Barclays Wealth, says: “We do psychometric tests to see how emotional a client is in investing. If they’re very emotional, and tend to over-react at the top and bottom of the market, we suggest using products that provide short-term smoothing, to eliminate short-term volatility.”

From a buyer’s perspective, in the words of Dan Ariely, “the great hope of behavioural economics is that learning about these biases will make us less likely to fall into them, and capable of more rational decision-making.”

This might be a big hope. Gerald Ashley, managing director of the risk consultancy St Mawgan & Co, and the author of Financial Speculation: Trading Financial Biases and Behaviour, says: “It’s not certain that you can train yourself to overcome these biases.” Besides, as James Montier of GMO has discovered, most investors admit such biases exist, but only in other people.

And yet there are some simple ways investors can try to defend themselves against their own folly. One way is to trade less.

Terrence Odean, professor of behavioural economics at the University of Berkeley, says: “We’ve shown in a study that investors who trade more actively tend to less well than more passive investors.” That’s probably because active investors, who check their portfolios every day and trade inter-day or inter-week, are making more emotional, instinctive and short-term reactions to short-term volatility.

You might also want to read less. Investors are bombarded with information, with highly emotive market ‘noise’, which can actually make it harder to make sensible decisions. James Montier suggests creating moments of monastic silence, in which one switches off one’s Blackberry, and one’s Bloomberg and Reuters terminals, and quietly reflect on one’s investment strategy.

You can try and track your own typical biases, to be more aware of them. Just as ancient philosophers (and modern cognitive therapists) advised that students use 'thought journals' to track our emotional habits, so some behavioural economists advise using 'investment journals', in which one tracks and reviews one's decisions. Try to set an investment framework, an impersonal constitution or set of rules and habits, that you adhere to, even in the most emotional moments. Sir John Templeton, for example, put standing orders on stocks in advance, telling brokers to buy them when they hit lows and sell them when they hit highs. He gave the orders in advance because he knew he wouldn’t have the strength to make the orders when the market was either panicking or rejoicing around him.

You can also set checks on your own impulses. Terrence Odean says: “Electronic trading has made investing a lot quicker and more seamless. But this is not entirely a good thing. Friction and obstacles can be a good check on impulsive behaviour. Investors can create these sorts of checks for themselves, like speed bumps.”

Greg Davies at Barclays Wealth says: “A good metaphor is Ulysses and the sirens. Ulysses knew that, when his ship was sailing past the sirens, he would be unable to resist their song. So he had himself tied to the mast, and stopped up his sailors’ ears. He took steps in advance to curb his enthusiasm.”

For investors, a siren-resistant strategy could be as simple as, for example, only taking investment decisions once a month.

In ancient philosophical terms, investors should seek perhaps to cultivate a Sceptic attitude to your own and other people's beliefs, avoiding over-certainty or over-reliance on models. Nicholas Nassim Taleb, himself an avowed follower of the Sceptic philosophy, calls this avoiding Platonic thinking.

This Sceptic attitude means investors should be wary of any experts who claim to be able to predict human behaviour too accurately. And that includes behavioural economists. There’s always the danger that behavioural economics will itself become the latest dogma, or the latest science used to dazzle credulous investors.

You can also embrace the Cynic attitude of 'defacing the currency', which means not believing the hype that companies try to sell you, but instead looking to pierce through the conventional labelling to the actual behaviour of a company. Appropriately enough, the investment fund that first exposed Enron for the over-hyped and dishonest fraud it was, was a fund called Kynikos Associates, named after the followers of Diogenes.

In general, you can try to be wary of the enemy of your self, and to cultivate a dispassionate, rational, 'Stoic' approach in your own investments, or to put your money into funds that also try and follow such an approach. But be careful of false labelling. One fund, called Stoic Capital, claimed to follow a Stoic-like approach to investing. The fund turned out to be a fraud.

Beyond Liberalism

One way to understand the modern politics of wellbeing - by which I mean the introduction of policies by governments aimed at cultivating the ‘wellbeing’, ‘happiness’ or ‘resilience’ of their citizens - is as an attempt to move beyond the confines of liberalism, and to answer the question, ‘where next?’

The liberal state aims to safeguard the rights of the individual in their own private ‘pursuit of happiness’, but it does not go so far as to tell the individual where or how they should pursue it. Each individual in a liberal society has liberty of conscience, and liberty to pursue their happiness as they see fit, as long as they are not harming anyone else.

Modern liberal governments are, more or less, disestablished from religion - they do not try to promote one particular religion or spirituality, and maintain a careful neutrality in matters of private moral and spiritual beliefs.

Modern liberalism did once have a telos, or goal: the goal was the removal of all obstacles, prejudices and superstitions, so that each individual could freely pursue their own private happiness.

We have more or less reached that goal in western societies today, particularly with advances in minority rights since the 1960s, and in homosexual rights over the last decade. So the overarching telos of liberalism has been reached, and we are left with liberal society as an assortment of private teloi.

But this leads to an inevitable restlessness among philosophers and policy makers. Where now? Now the priests and monarchs have been defeated, and the old superstitions over-turned, now we are free to pursue our private inclinations...where next to steer the ship?

Export liberalism, defend liberalism

One response has been to export liberalism: to make the rest of the world as politically, economically and sexually liberated as we are. This export of liberalism to Eastern Europe, Asia and the Middle East has been a source of excitement for policy makers since the fall of the Berlin Wall. It gives them the nostalgic sense of the grand old March to Freedom, a march which their own societies have sadly already completed.

Another response has been to fling oneself into the fight with radical Islam and Christian fundamentalism. Liberalism hasn’t won, goes this argument. It’s under attack again! Once more unto the breach, we must fight off the enemies of freedom.

This is another good way of avoiding the horrible feeling of liberalism having arrived at an end point, and not being sure where to go from here. It takes its followers - Hitchens, Dawkins et al - back to an earlier time, to the 16th, 17th and 18th centuries, when liberalism was genuinely under attack.

But it’s anachronistic and nostalgic - Dawkins and his ilk are like bored historical re-enactment societies, spicing up their weekends by play-fighting battles already long-since won.

A third response, the one I’m most interested in, is to seek to move beyond modern liberalism’s defence of the negative liberty of its citizens, and to find some ideal of positive liberty to promote.

Isaiah Berlin and the dangers of positive liberty

Negative liberty, as Isaiah Berlin defined it, is the protection of our freedom to pursue our own private ends. Positive liberty, by contrast, is freedom from unhappiness, freedom from our lower selves, freedom to fulfill our highest selves.

Ideas of positive liberty are founded on essentialist views of human nature. They argue that man has an essential nature which is not fulfilled at present, but which could be fulfilled and made whole under the right social and political conditions.

Man has a telos, a goal, which is the fulfillment of his nature. Government can help man in the achievement of his fulfillment as a human being. So politics is the movement towards the telos of the fulfillment of mankind.

Berlin wrote most of his best writing on the dangers of political philosophies that sought to cultivate positive liberty in its citizens. He claimed that such efforts - in Plato, Rousseau, Marx and others - led directly to the totalitarianism of Hitler, Stalin and Mao.

Berlin declared that the idea of governments ‘fixing’ humanity and making it whole once more was both deeply seductive, and profoundly dangerous. We have to accept, Berlin insisted, that humans will never agree on the aim of life, and any attempts to enforce a common telos onto individuals will result in tyranny and oppression.

The rise of the communitarians

Berlin’s diatribe against positive liberty lasted in influence for a good half-century. But it’s come under attack in the last twenty years, particularly through the rise of communitarians like Alasdair MacIntyre, Charles Taylor, and Michael Sandel - who for my money are three of the greatest philosophers writing and teaching today.

The key text in this rise of communitarianism is MacIntyre’s 1982 book, After Virtue. MacIntyre takes aim at the liberal idea of the state maintaining moral neutrality and avoiding any positive idea of the ‘good life’ or the telos of human existence.

This sort of liberalism ends up in moral relativism, MacIntyre argues, where people no longer have a common moral language, and public ethical debate is reduced to mere emotivism: ‘I am right, because I feel I am right’, or ‘I am right because I can shout the loudest’. This is the moral Dark Ages in which we now find ourselves, he says.

His ideal society, by contrast, is medieval Europe, when Europe was united under Christian Aristotelianism, with its conception of the cultivation of the virtues as the path to happiness and the fulfillment of man.

MacIntyre dreams, at the end of his book, of a society unified once more by a common idea of the virtues, in which government plays a role in the cultivation of those virtues, and thus in the fulfillment of its citizens as human beings.

His disciple, Michael Sandel, also calls in his 2009 book, Justice, for a return to virtue politics - to a politics based on an Aristotelian idea of the virtues and the common good. He writes that the idea of the morally neutral state is actually a fiction:

Justice is inescapably judgmental...Justice is not only about the right way to distribute things. It is also about the right way to value things...The challenge is to imagine a politics that takes moral and spiritual questions seriously, but brings them to bear on broad economic and civic concerns, not only on sex and abortion.

So, at the heights of contemporary political philosophy, there have been attempts to move beyond Berlin’s negative liberty, and to build a new virtue politics, based on Aristotle’s idea of the cultivation of the virtues as the fulfillment of man’s biological, political and spiritual nature.

The modern politics of well-being

And this philosophical return to Aristotle and the Greek idea of eudaimonia has also filtered down to the policy level as well. A key policy publication in this area was a collection of essays published by Demos in 1998, called The Good Life.

The pamphlet calls for a ‘remoralization of policy debate’, and for a new politics that goes beyond merely seeking material prosperity, and which instead seeks also the fulfillment of its citizens. The collection quotes Aristotle’s Nicomachean Ethics in its opening essay, when it writes:

A fulfilled life is one that has, in modern parlance, some ‘project’ or, as the ancient Greeks put it, a goal or end. But not anything counts as a life project of a kind whose achievement brings real fulfilment.

Perhaps the most interesting essay in the collection is by Geoff Mulgan, formerly director of Tony Blair’s strategy unit, then the founder of Demos, now the head of the Young Foundation. Mulgan writes that governments should not be afraid of promoting an idea of the ‘good life’:

A famous philosopher once asked how the same good life could ever be right for a human race composed of people as different as Marilyn Monroe, Einstein, Wittgenstein and Louis Armstrong. Any single view of the good life, he argued, must inevitably be oppressive. The best that we can hope for is a society in which everyone is given as much freedom as possible to define the good life for themselves.

This view is undeniably attractive. It accords with the ‘non-judgmental’ common sense of most Western societies today. Yet it is as profoundly wrong as any belief could be. Any society which took it seriously would soon become disfunctional. It is wrong, in the first place, because so much about the good life is not solely a matter of individual freedom, but is underpinned by collective provision, by social orders, by the things we share - clean air, safe streets, civility.

It is wrong too because human beings have much in common: we share much the same biology, and many of the same drives and needs, however different we may appear on the surface.

And it is wrong because it ignores the evidence that there have been remarkably constant features of the good life across very different times and very different places....some things are timeless and universal.

He includes among such ‘timeless values’ the family, the community, access to goods, the environment and, finally, ‘the soul’:

a spiritual understanding of transcendence, of connectedness, and awe in the face of the universe, has been made manifest in the church, temple or mosque at the heart of every community...this deep element in the good life is about simplicity and fundamentals. As the medieval Christian mystic Meister Eckhart commented, God is not found in the soul by adding anything but by a process of subtraction.

So Mulgan is really returning to an Aristotelian idea of man having a common biological nature, and that the cultivation of the virtues is the fulfillment of this nature: what Aristotle called eudaimonia, or flourishing.

Politics, Mulgan suggests, can be re-invented as the collective pursuit of a common idea of eudaimonia. The idea comes from Aristotle, but the only time society really was united under such a philosophy was the Middle Ages, when Thomas Aquinas succeeded in making Aristotle the ruling philosophy of Europe.

What does a neo-Aristotelian politics look like?

So what would this sort of neo-Aristotelian politics look like? Well, perhaps there have been some steps towards it in the UK in the last few years under New Labour.

Take, for example, the introduction of citizenship classes in 2002, an initiative spear-headed by LSE professor Bernard Crick.

Crick saw citizenship classes as a way to cultivate the ‘political virtues’ of self-confidence, autonomy and active political engagement. He quotes with approval another Demos pamphlet, published by David Hargreaves in 1997:

Civic education is about the civic virtues and decent behaviour that adults wish to see in young people. But it is also more than this. Since Aristotle, it has been accepted as an inherently political concept that raises questions about the sort of society we live in, how it has come to take its present form, the strengths and weaknesses of current political structures, and how improvements might be made... Active citizens are as political as they are moral; moral sensibility derives in part from political understanding; political apathy spawns moral apathy.

Another, less obvious, return to the classical virtues came in the shape of the 2008 Improved Access to Public Therapies (IAPT) policy, which was the brain-child of another LSE professor, Richard Layard. Through IAPT, Layard secured £180 million in funding to train 3,500 new therapists in Cognitive Behavioural Therapy (CBT).

As I’ve written before, CBT is a therapy grounded in ancient Greek philosophy, which uses the ‘Socratic method’ to teach people how to examine their beliefs, see how they lead to their emotions, and then hold them to philosophical account.

While CBT presents itself as a science, it is very much grounded in the Socratic, Stoic and Aristotelian idea that mental health involves the cultivation of the ancient Greek virtues of rational self-examination, self-knowledge and self-control.

Lord Layard has, together with Geoff Mulgan, also embraced the new field of Positive Psychology, which attempts to build resilience in young people (particularly school-children and soldiers), through the teaching of the CBT techniques of rational self-examination and self-control.

Layard and Mulgan are behind a pilot scheme, which is teaching Positive Psychology in secondary schools around Britain. They hope that Positive Psychology could supplement, or replace, another new New Labour introduction to the curriculum: Social and Emotional Aspects of Learning.

Again, Positive Psychology presents itself as a science rather than a moral philosophy. Its founder, Martin Seligman, insists that it is merely descriptive, and does not take any moral position on what constitutes the good life. It merely describes the different forms of happiness, without suggesting which form humans should seek (so Seligman claims).

And yet behind the pseudo-science is very much the Aristotelian idea of the good life as the pursuit of virtue and the fulfillment of our human nature. In place of the Aristotelian virtues, we have Positive Psychology’s idea of the ‘strengths’: courage, temperance, wisdom, self-control etc.

Positive Psychology tries to ‘prove’ what interventions lead to eudaimonia through the use of questionnaires and life satisfaction surveys. “It’s Aristotle with a seven-point scale”, as one practitioner put it.

A word of warning

These policies are attempts to go beyond merely the liberal defence of negative liberty, and instead to promote positive liberty, to promote the eudaimonic virtues of self-knowledge, self-mastery and political engagement.

They are attempts to take politics beyond moral relativism and to find a new common idea of the Good Life which we can seek to cultivate in ourselves and our children.

I personally have been deeply influenced by this attempt to go beyond moral relativism, go beyond post-modernism, and return to a virtue-based politics. I’ve been inspired by it ever since I happened to buy that Demos collection, The Good Life, when I was in my second year at university in 1998.

But a word of warning: both CBT and Positive Psychology present themselves as empirical sciences, rather than moral philosophies. They insist that they are morally neutral, that they are merely interested in scientifically testing 'what works' in the pursuit of happiness.

This is what has enabled governments to embrace them and promote them. Governments can then say that they are not over-stepping the bounds of moral neutrality, are not dabbling in elitist moral paternalism. They are merely promoting well-researched scientific and technocratic paths to well-being. It's not moral philosophy. It's science.

Now in some ways, ancient philosophy was a science. It was grounded in a theory of human psychology, a theory of how humans can learn to control their thoughts, emotions and behaviour. This theory is today known as the cognitive theory of emotions, and it has been largely proved correct through the success of CBT in helping people overcome emotional and behavioural disorders.

So ancient Socratic philosophy was a science. It told people how to change their thoughts, beliefs and emotions.

But it was also a moral philosophy. It went on to tell people what they should believe and value.

And here, the various philosophical schools that descended from Socrates actually disagreed. There was no consensus about what humans should value, or what the goal of life should be.

The Stoics believed that virtue was all that was sufficient for happiness. The Aristotelians believed that the good life consisted in virtue, but also in some external conditions, such as wealth and freedom. The Cynics believed in dropping out of society to return to nature. The Epicureans believed in the pursuit of utility and pleasure.

They all shared the principles of Socratic psychology and Socratic ethics: the idea that that you can learn to know and control your thoughts, and that it is a good thing to do this. But they then took this basic starting point in different directions.

So ancient philosophy was a two-stage process:

Stage one - the scientific stage: how to know yourself, how to challenge your beliefs, how to control yourself.

Stage two - the moral stage: what you should believe, what you should value, how you should live.

I believe governments can and should teach their citizens Stage One. I think CBT does this very successfully. It is grounded in a scientifically-proven model of human psychology, and it trains people how to become conscious of their thoughts and beliefs, how to take responsibility for their thoughts and beliefs, and how to change them.

It doesn’t go much further than that. It doesn’t tell people what they should value or seek in life, beyond teaching them the basic Socratic ethics and techniques of self-knowledge and self-mastery (one could argue that these are not valuable ethics, but I think most democratic societies can agree that they are).

Positive Psychology at its best simply teaches young people Stage One: here’s how to understand and control your thoughts and emotions.

But it also, I would argue, tries to teach people Stage Two: here’s what you should believe and how you should live if you want to be happy. And it tries to do this as a science.

I think this is wrong, because it is bad science - you can’t prove what makes a fulfilled or meaningful life - and it is even worse moral philosophy. It doesn’t teach people that there are different competing models of the Good Life, which may share common features, but which also have important differences.

Teaching young people that there is one scientifically proven path to happiness actually damages their ability to think for themselves: which is a crucial part of Stage One, and a crucial part of their ability to achieve happiness.

Stage Two should never be presented as a ‘science’. There is no scientifically-proven path to the Good Life, because the Good Life always involves questions of value, belief and virtue. It will always be a matter of debate, and you should teach young people to understand and debate the different approaches to question of what makes a Good Life.

A proposal

That is why I think the Good Life should be taught at a subject that includes religious education, citizenship education, and emotional literacy. These subjects are at the moment three different subjects, but really they are all the same thing. They are all philosophy.

Emotional literacy is the teaching of Stage One: how do we learn to control our thoughts and feelings? This is the entry level Socratic teaching that makes religious education and citizenship education possible.

Religious education and citizenship education are both Stage Two: what is the meaning of life, what should we value in life, and how should we pursue it, as individuals and as a society?

This should involve the teaching of different models of the Good Life: Christian, Muslim, Stoic-Aristotelian, Buddhist, and liberal. It should encourage debate and experimentation, rather than passive acceptance of either ‘religious tradition’ or ‘scientific fact’.

It should teach both the differences in these traditions, and their common features - their common acceptance of the Socratic goal of ‘knowing thyself’ and learning to control yourself (Stage One).

It is thus based in a common idea of human nature and a common set of spiritual practices. But it also acknowledges and accepts the diversity of approaches to the Good Life, rather than trying to pretend there is one scientifically-proven path to the Good Life, which is a pernicious and harmful idea.

A new virtue politics, a new politics of eudaimonia, can go some way beyond complete moral relativism. But it should tread extremely carefully. And it should not try to sidestep honest moral debate with spurious claims to scientific objectivity.

The Moral Muscle

The ancient Greeks used to compare moral philosophy to going to the gym: to become a virtuous person, you have to practice over and over, like a wrestler, to strengthen your 'moral muscles'. The same metaphor is used by the psychologist Roy Baumeister, whose excellent talk at the recent Edge.org conference on moral sciences you can see here.

My favourite bit in the talk:

I think in part I got invited here, is I have a history of doing research on self-regulation and self-control. The essence of self-regulation is to override one response so that you can do something else —usually something that's more desirable, better either in the long run, or better for the group.

That is why we've called self-control the moral muscle. I'm going to unpack that and comment on both parts. It's moral: self-control is moral in the sense that it enables you to do these morally good things, sometimes detrimental to self-interest. So if you get lists of morals, whether it's the Seven Deadly Sins or the Ten Commandments or a list of virtues and so on, they're mostly about self-control. And you can really see self-control as central to them, so there are the Seven Deadly Sins of gluttony, wrath, and greed and the rest. They're mostly self-control failures. Likewise, the virtues are exemplary patterns of self-control. So that's the moral part of the ‘moral muscle’, it's a capacity to enable us to do these moral actions, which are good for the group, even though overcoming this short-term self-interest.

The muscle part, that's kind of emerged from our lab work, independent of any moral aspect. There seems to be a limited capacity to exert self-control that gets used up. It's like a muscle, it gets tired. As we found in many studies, after people will do some kind of self-control task, then they go to a different context with completely different self-control demands, they do worse on it – as if they used a muscle and it got tired there.

So it's a limited resource that gets exhausted. The muscle, there are other aspects of the muscle analogy. If you exercise self-control regularly, you get stronger. I wouldnt want people to say, well, if self-control and morality's a limited capacity, I'm never going to do anything to exert self-control because I don't want to waste it. No, au contraire, you should exert it regularly; it will make you stronger and give you greater capacity to do things.

And certainly then we find that when people have exerted this muscle and it's tired, so to speak, or when they've depleted, you know, ego depletion's a term for it, depleted their resources, then behavior drifts toward being less moral. So we found that people are perhaps more gratuitously aggressive towards somebody else after they've exerted self-control and used up some of their “moral muscle” resources.

In a study on cheating and stealing we published a couple of years ago, people had to type up an essay about what they had done recently, either not using words with the letter 'a' or not using words containing the letter, 'x.' There are a lot more words contain an 'a' than 'x’, so the former requires much more self-control and overriding. And so when you're trying to make up a sentence and you keep reaching the point, oh look, there's an 'a' in that word and you have to override it, and so it uses self-control to keep overriding one response and coming up with another, that depletes people's resources. So they were more depleted in the “A” than in the “X” condition.

Afterwards, then they went to another room, supposedly another experiment where they're taking an arithmetic test and they're being paid for the number of ones they get right. They either scored it themselves, or the experimenter scored it for them. Of the four conditions (depleted or not, and self-scored or experimenter scored) all got about the same number right —except for the depleted people who scored their own tests, they somehow claimed to get a whole lot more right. It was not plausible they were actually getting smarter by virtue of having typed while not using words with the letter 'a' in them, because when the experimenter scored them, he couldn't find any difference. Got about the same number right. But when nobody was checking and their answer sheet was shredded and they said, you know, I got six correct. Then suddenly they got a whole lot more correct. So that suggests increase in lying and cheating, and effectively stealing money from the experiment.

There are some other findings, too, depleted people are more likely to engage in sexual misbehavior, and so on. So moral behavior does seem to go down when people have depleted their moral muscle capacity. More recently, we're working with Marc Hauser on seeing if depletion changes, how people make moral judgments of others, that's proving a little bit more slippery. But again, this kind of process is geared toward regulating your behavior more than your thinking about others. So it's not surprising that it shows up right there.

A couple of other things we've found, relevant here. Choice seems to deplete the same muscle as self-control, it's the same resource. So we have people make a lot of choices about which of these two products would you buy and so on, afterwards then their self-control is damaged, too, so making choices uses up the resource needed for self-control. That resource seems to be tied into some physiological processes. We found changes with the glucose levels in the bloodstream, and so something about doing these advanced kinds of self-control acts uses up this resource and depleted self-control in the bloodstream.

If you give people a drink, after manipulation we give them lemonade mixed with sugar or with Splenda, and Splenda they still act bad, but they got sugar in there, it gives a quick dose of glucose to the bloodstream and suddenly their behavior is more self-controlled; in some cases more moral, making more rational decisions and so forth. And conversely, too, if they're depleted from self-control, then their choice process is changed to be more shallow and so forth.

In terms of self-regulation plus choice, I mean, you start now to think that this same capacity is used, the same resource used for choosing and for self-control, and in maybe a couple of other things as well. There are some data on initiative. So instead of talking about it in terms of regulatory depletion, we're trying to come up with a bigger term, and that's how I got to talking about free will.

Keith Stanovich and The Robot's Rebellion

Listen to this fascinating interview with Keith Stanovich, a cognitive psychologist at the University of Toronto, and the author of the book, The Robot's Rebellion.

Stanovich starts by assuming that Richard Dawkins is correct in his universal Darwinian view of human psychology - that humans are vehicles for self-replicating genes and self-replicating memes, and that these genes and memes act in their own interests - to replicate themselves - rather than in their hosts' interests.

The rebellion in the title comes from the optimistic assumption, shared by both Dawkins and Stanovich, that, uniquely in the animal kingdom, humans can become aware of their robotic programming, and can choose to over-ride it through higher level rationality.

This strikes me as a view of human psychology very close to that found in ancient Greek spirituality, as found in Socrates, Plato, Epictetus or the Sceptics, or in modern thinkers like Gurdjieff.

Stanovich says in the interview:

We can say we have a meaningful life because we can lead an examined life [compare to Socrates' famous saying, 'the unexamined life is not worth living']. We can know that the desires we have are self-chosen in a way they wouldn't be if they were first order desires.

What does he mean by first order desires? The idea is from the philosopher Harry Frankfurt, who compared first versus second order desires. First order desires are where we simply follow our automatic or base instincts, and become what Frankfurt called a 'wanton'. But we can reason about our choices and preferences, and 'prefer to prefer' something or 'prefer not to prefer something'.

A heroin addict, for example, might prefer to do heroin, but might reason about this, and decide it's not in their higher interests to follow this preference, so they over-ride it. They prefer not to prefer heroin.

So we start to climb the ladder of higher order preferences [the metaphor of the ascent of desire, from Plato]. We have goals we select reflectively. As Robert Nozick put it, we achieve the 'rational integration' of our desires.

So being rational is a type of robot's rebellion, when we rebel against our genes' or our memes' suboptimal choices for us. The discoveries of science, logic and decision-making are about ways of optimizing at the level of human beings.

Our machine often substitutes quick affective reactions, like the fight or flight instinct, which might work well in some situations, but not in more complex situations, like when we're trying to negotiate our office politics, or choosing investments for our pension plan.

In those instances, cultural inventions of rationality come into play.

The same is true at the level of memes. You can carry around memes you have picked up from your environment, but which don't serve your best interests. If the goals you're optimizing are non-reflectively acquired memetic goals, they might not be optimal for you.

So how to rebel?

The most important lesson is: be rational. Make sure the choices you make are personal and not chosen for you by your genes or your mimetic environment.

If you install memes, make sure that they accurately reflect reality.

Only install memes that do not preclude the installation of other memes in the future. And avoid memes that resist evaluation.

[This is actually a fascinating way of viewing schizophrenia - as a person becoming host to a parasitic meme that installs itself and then resists all attempt at evaluation. So this meme model of psychology is actually not so far from the old demonic model of psychology.]

He concludes:

We are rational self-evaluators. By rationally self-evaluating, we become self-determining.

All well and good. But why does the interviewer keep on saying that this view of human psychology does away with ideas of the self? It seems to be shot through with ideas of the self: choice, agency, preferences, goal selection, self-evaluation, self-determination.

Of course, a difference between Stanovich's view and that of most ancient Greeks is that the latter thought that becoming rational was a fulfilment of our nature, rather than a rebellion against it.

Closer to Stanovich's view were some Gnostic schools, in the first, second and third centuries AD, who thought achieving self-awareness was a rebellion against one order of nature, or rather, an escape from the evil ruler of the world, the demiurge, to fulfil our higher divine nature.

This more Gnostic view of 'nature as prison' is shared by modern wackos like the Scientologists and David Icke, who also wrote a book called...The Robot's Rebellion. Gadzooks, could Icke be right???

Behavioural psychology: the cartoon

This is awesome: a 10 minute animated version of the author Dan Pink's talk at the RSA on human motivation and what drives our job choices (it's not just money):

Go With The Flow

Positive Psychology is an attempt to define 'the good life', scientifically measure the activities that lead to it, and so arrive at a scientific hypothesis for reaching it: the fabled 'happiness hypothesis' that Positive Psychologists search for, like alchemists searching for the Philosopher's Stone.

I've spoken about how some 'happiness scientists' define happiness as subjective reports of well-being, which one can measure (they argue) with a seven-point scale, asking people 'how happy does this make you, if one is very unhappy and seven is very happy'.

The problem with this, as has been discussed, is that it assumes the variety of human experience, and the varieties of human happiness, can be measured in such a simplistic way, without asking whether there are higher or lower forms of happiness, or if happiness should be the main 'goal' of human life. There are deep philosophical assumptions in this branch of happiness science, which it rarely addresses.

Positive Psychology has taken the step of suggesting happiness is not one thing, but instead is divided into three main sorts of happiness: hedonic happiness (positive feelings), which you can measure with seven-point scales; engaged happiness (feeling absorbed in what you're doing), which you can also measure; and meaningful happiness (serving a worthy higher cause) which they're not sure how to measure.

Ignoring the fact that Positive Psychologists admit that meaningful happiness is very difficult to measure scientifically, and therefore the whole basis of the scientific search for the 'Good Life' is called into question, let's look at the second form of happiness, 'engaged happiness'.

This type of happiness is supposed to have a lot of what the psychologist Mihaly Csikszentmihayli calls 'flow', which are moments when a person is completely absorbed in what they're doing, to the point where they lose track of time and space.

Csikszentmihayli writes: 'a good life is one that is characterized by complete absorption in what one does'.

You can measure the extent to which someone feels the flow doing different activities, by beeping them throughout the day and asking them the extent to which they are in 'the flow'. This must be pretty annoying, there you are, in the flow, then 'beep!' Darn it, it's Csikszentmihayli, interrupting the flow again.

Anyway, leaving that to one side, Csikszentmihayli came up with this concept in the 1960s, when he observed artists at work, and saw how they became completely caught up in their creative endeavours, completely focused on them, completely engaged with them, until they were finished, and they lost interest in the work and turned to something else.

How good a model of the 'good life' is this?

Well, there are obvious philosophical problems with it. We'd have to say, lots of different activities can be highly absorbing. Heroin addicts are utterly absorbed in what they do. Gamers get utterly absorbed in playing computer games, playing for hours without even getting up or eating. Market traders can easily become totally absorbed in what they do, totally gripped by it.

While we might accept that this sort of deep engagement in what you are doing is one of the pleasures of life - and part of the answer to the question 'what is the good life?' - don't we have to say that the goodness depends on the activity in which you are absorbed?

That's to say, the complete absorption of a heroin addict in doing heroin is morally and qualitatively different from the complete absorption of the mystic in divine contemplation. Isn't it?

Let's take two artists, both completely absorbed in their work. One is writing the next great novel, and one is building a car out of match-sticks. Doesn't the 'worth' of their activity depend to some extent on the worth of what it is they create? If a friend of ours spent five years utterly absorbed in a novel, and the novel turned out to be completely rubbish, wouldn't we think that the person has incorrectly decided where their talents lie, and had to some extent wasted their time?

Let's even say that a person becomes completely absorbed in their work, and produces a good novel, but they become so absorbed that they disregard all their relations, get divorced from their wife and separated from their children, don't eat or drink properly, and end up a gibbering wreck. Is that a 'good life'? Perhaps it is, if the book is considered 'worth it', but it's very much a matter of opinion and debate, not scientific accuracy.

In other words, there's the question of worth: is the activity that you habitually absorb yourself really 'worthwhile'? Is it helping the world? Is it healthy for you?

Secondly, there's the question of talent: are you really any good at it? Are you wasting your time?

Thirdly, there's the question of balance: should you spend all your time pursuing the flow moments, or is there something to be said for balancing your 'gift' with other activities, such as building loving relationships or taking exercise?

These are my main objections to defining the good life simply as 'having a lot of flow', but there are probably other objections.

Dan Ariely and behavioural economics

I'm writing a piece for the Wall Street Journal on behavioural economics, which is a relatively new field of economics that tries to incorporate the psychology of irrational human decision-making into its theories. It's become very hip in the last few years - one of its practitioners, Daniel Kahneman, won the Nobel Prize for Economics in 2002 - and particularly faddish since the Credit Crunch cruelly exposed our capacity for irrational market behaviour.

I recently interviewed one of its leading thinkers, Duke University economist Dan Ariely, who wrote a successful book in 2008 called Predictably Irrational, and who's just brought out a sequel, called The Upside of Irrationality.

For once, my economics journalism is meeting up with my psychology journalism, so I thought readers of this blog might enjoy reading the interview:

JE: The main idea in behavioural economics seems to me that humans have certain 'cognitive biases' which lead them to make irrational choices in life, including economic choices. Can you tell me some of them that investors should be particularly wary of?

DA: There are quite a lot of them. The question is which come into play in which environments. The easiest with regard to investing is becoming aware of how our emotions affect our decision-making.

How do emotions work on us? They come from the outside. We react to an external stimulus, this sets off a reaction inside us, and once it starts, it's very difficult to switch off. So some very simple advice for investors is to try to make decisions without the influence of emotions.

For example, imagine two different ways of investing. One is open your computer, open up your online brokerage account, see how your portfolio is doing, and then make a decision to buy or sell stocks. That is a very emotional way of investing, because you will have an emotional reaction to the day-to-day performance of your stock and will make a decision based on your emotions.

Instead, you could first think about your stock strategy, reason about it, read, think, contemplate, and then, only occasionally, look at how the stock is doing.

JE: So check your portfolio performance less often?

DA: Yes. And be aware of your emotional state when you do so, and try not to make instantaneous decisions in the heat of the moment.

Another cognitive bias to be wary of is 'anchoring', also known as disproportional affect. People get very attached to the price at which they originally bought something, and will hold on to a stock for too long, when they should have already sold it, because they want to see it rise above the original price they bought it. Because realising a loss is very painful.

So they don't ask themselves 'will this stock go up or down in the future?' but 'will it go up and down relative to the original price I paid?' And many trading websites exacerbate this by showing the original price you paid for a stock. This can lead you to make decisions not in your best interests.

JE: It sounds like you don't think much of 'gut instinct', or the idea of the wisdom of following our instinctive reactions.

DA: No, I don't. You need to educate your gut instinct, train it, and subject it to constant feedback. Let's say you are kicking a soccer ball on a field, and when you kick it, you close your eyes and guess where it will land. If you do that 100 times, your gut instinct might tell you quite accurately where it will land.

But investing in the stock market is much more complicated than that. The link between cause and effect is much harder to follow, and the level of feedback is much more complex, and noisier.

JE: You say that the great 'hope' of behavioural economics is that it can, or has, discovered the typical cognitive biases that humans are susceptible to. And by telling people about these cognitive biases, behavioural economics can make us less irrational, and more rational. But is there any evidence that people can actually train themselves to be more rational?

DA: Yes. For example, we're teaching people to stop paying a very high amount for their portfolio managers, because a lot of them are just index trackers.

JE: OK...Now it seems to me that when behavioural economics is talking about teaching people to become more rational and less emotional, they're really talking about therapy or self-help. Is that what behavioural economics is getting into? For example, training people to be more aware of their thinking processes and emotional reactions through, for example, meditation?

DA: Not really. We're thinking about very simple mechanisms. For example, when you go into a restaurant, and you tell the waiter you're on a diet, and the waiter offers you creme brulee, you'll choose it, and meditation won't help you. Maybe the Dalai Lama can resist the creme brulee, but most of us can't. So let's create a situation where the waiter doesn't offer you the creme brulee. Let's find a different way to present the choices, or a different way to process it.

JE: You're talking about two different things: firstly, changing how a company presents its consumer choices; and secondly, changing how we process those choices. On the first point, how do you change how a company presents its consumer choices? Through government regulation? Because presumably it's in a company's interests to get a buyer to manipulate these cognitive biases so people spend as much as possible.

DA: Not always. An investment house could try to 'nudge' investors towards better and more rational decisions. And on the second point, how an individual processes the consumer choices, you might ask yourself, do I really want to go into this situation in this emotional state?

JE: Let's say I do train myself to be more dispassionate and rational in my investing. If the rest of the market is still just as irrational in its decision-making, does investing 'rationally' become less about assessing the actual worth of a company, and more about accurately predicting the craziness of other people?

DA: Some of it is like that. If people are running away from a market because they're panicking, you can make a dispassionate decision that they have missed the real value of a stock. A lot of hedge funds do that - their strategy comes from taking advantage of market 'inefficiencies', which often mean when people have been led by their emotions to make a false assessment of something's value.

If everyone was perfectly rational in their market decisions, and prices perfectly reflected the value of an asset, there would be hardly any trades. Trades come because of asymmetries in information, and because you think you're more rational than the others.

[This, by the way, raises a question in my mind: economics assumes that things have a 'value', and you can discover this 'true value' through scientific analysis of supply and demand etc. But that seems like nonsense to me, because how can science ever analyse whether something is really or value, or should be of value, or not? How can it tell us what gold is 'really' worth? Maybe it's really worth nothing and it's only the foolishness of humans that thinks it is. By 'fundamental value' what it really means is the consensus of the irrational mob, and that consensus is never stable.]

JE: It seems like one of the mistakes made by classical economics, and one of the mistakes made during the Credit Crunch, was economists became over-confident about their ability to predict and control events. Is there a danger that behavioural economics will become the new consensus, and economists will fall prey to the same over-confidence, by believing that it can somehow accurately 'predict' our irrationality?

DA: The difference between classical economics and behavioural economics is that the over-confidence is not symmetrical. I don't think behavioural economics will replace classical economics. Nobody does. Classical economics captures some of human behaviour, but not everything. Behavioural economics points out that some aspects of human behaviour are missing, and they try to supplement classical economics with that missing component.

So standard economics says we can describe reality 100% accurately. We say, this model doesn't include everything.

JE: And the hope is that, through providing this supplement, economics will become more accurate, and better able to predict and control events?

DA: Yes.

JE: But isn't that falling into the same trap of over-confidence in social scientists' predictive expertise?

DA: We're empirical. The standard economic approach is almost a religious, faith-based approach. We're happy to do experiments. Because we deal with data, our claims are not 100% certain, but we can get closer to accuracy.

JE: But arguably that is simply putting a lot of faith in experiments, and their applicability to the messiness of the outside world. Some behavioural economists, like John List, have shown that some experiments that work one way in a laboratory environment work very differently in a field environment where people aren't aware they're in experiments.

DA: Sure, but John List is not against experiments per se. He's just saying you need to run both lab experiments and field experiments. It's like medicine - you start off in the lab working on rats, then you try things out in the field, then finally, when you're reasonably confident, you might introduce it through policy.

JE: Finally, I want to talk about the work of Daniel Kahneman, and his studies of happiness, what makes people happy, and how this should influence public policy. What do you think of his work?

DA: I think that field, of measuring and studying happiness, has learnt some really important things, and some stuff we don't yet understand. I think it's a little early to introduce the ideas as public policy. That's a little premature, but it could eventually help.

JE: But do you think economics, as a social science, can ever tell us what we should choose to do in life? Isn't that a question for moral philosophy?

DA: Well, economics could tell us that people who spend their entire lives working to be rich and happy might end up rich but not necessarily happy.

JE: But can happiness levels really be measured scientifically, without getting into philosophical questions of what happiness is, of whether some forms of happiness are higher than others?

DA: So you have a problem with the idea of measuring reported satisfaction levels. But what if we showed that, for example, some life choices led to higher levels of depression, or to a greater incidence or heart attacks. Would you have a problem with using public policy to change that?

[I didn't answer...but you could say that is a question of the moral education of the individual, of trying to teach them what should be valued in life, and that it's difficult if not impossible to 'prove' that certain life choices lead to depression, or to make the moral argument that just because a life choice leads to depression, we should definitely not choose it.

The highest levels of suicide are among doctors and artists, but does that mean no one should become a doctor or an artist? Some life choices involve more stress and suffering. That doesn't mean no one should choose them.

I also wasn't entirely convinced that simply telling people what cognitive biases to look out for will necessarily make them less likely to fall into them. The sort of mental training you need, it seems to me, is more intense, and will very probably end up in mindfulness and relaxation exercises like those found in Buddhism; or in cognitive self-scrutiny exercises like those found in Stoicism or CBT.

And, finally, it does seem to me that behavioural economics could easily fall into the same fallacy of expertise that standard economics fell into - the fallacy that social scientists can accurately predict the messy chaos of human behaviour. I tend to side more with Nicholas Nassim Taleb, another economist who has the courage to say simply 'we know a lot less than we think we do, so be humbler about your powers of prediction, and accept that reality is going to constantly confound your theoretical models.]