Emotion versus Reason

I’m still thinking about NOVA’s Mind over Money: Can Markets Be Rational When Humans Aren’t? earlier this week, and the connection it drew between emotionally fueled subconscious decisions and the economic meltdown of 2008. I’d encountered similar ideas in George Lakoff’s The Political Mind, with a focus more on politics than on economics.

We all grew up with an Enlightenment view of reason: that it is logical, universal, unemotional, and interest-based. (This could be a textbook definition of the process supposedly underlying Chicago School’s efficient markets hypothesis.) My father was my model: confronted with a problem, my first impulse is to learn as many facts as possible, to master it with knowledge, just as he did. This is me — hyper-rational. I used to actually believe that voters use primarily facts and reason to make electoral choices. I no longer do.

Recent brain research, especially that facilitated by functional MRIs that show in which areas the brain is active during tasks, has conclusively demonstrated that the dichotomy between reason and emotion is false. Books like Damasio’s Descartes’ Error and Westen’s The Political Brain go into this in detail, but the thesis is that reason requires emotion. In an extreme example, people with specific brain damage making them incapable of feeling emotions or detecting them in others are unable to function rationally.

We think we can divorce reason from emotion because most (and they really mean "most" — an estimated 98%) of reason is unconscious. Our ancestors didn’t have time to reason consciously about the best thing to do, so we’ve evolved to think and behave reflexively. Malcom Gladwell’s Blink is all about these quick and sophisticated judgments. Scientific experiments (see Restak’s The Naked Brain) demonstrate conclusively that your body reacts before your brain has received the nerve inputs on which to base a conscious decision. Our cognitive unconsciousness is really running the show.

That’s why a self-proclaimed rational person like me can think she wants Just The Facts, Ma’am, but reacts to subconscious stereotyping in a decisive way. In elections, I prefer the eloquent candidate who rallies us by appealing to our best instincts, rather than the “Trust me, I know how to do this” daddy figure.

I agree with the research that says we are not nearly as rational as we think. We are making very complex and subtle assessments all the time of which we are not consciously aware. Our reasoning is more like after-the-fact rationalization of decisions we’ve already made. Now, I do think that more information makes for better decisions, but both research and the results of “negative campaigning” show that our “free will” is more limited than we like to think. We use the emotional subtext in our decision-making because we can’t not do so. And these kinds of subconscious evaluations have been shown to be surprisingly sophisticated and often reliable. If someone makes your skin crawl, you should probably trust that instinct or intuition.

Paying kids to achieve

I’ve always had a thing about external reward systems for kids: I believed (and could quote research backing the idea) that these things (stickers, honor rolls, valedictorians, etc.) supplant the intrinsic motivation that we really want our kids to have. I took this to such extremes that I would not tell my kids I was proud of their grades (although I would say, “Aren’t you proud of yourself?”), let alone pay them for A’s as our neighbors did. [Naturally, this meant that my kids were exasperated at never getting those magic words from me; the best laid plans oft go awry.]

Anyway, I certainly never supported the idea of paying kids to perform. A recent Time magazine article on random-sample research has me wondering about that stand. The simple and cheap intervention of paying second graders to read and pass quizzes on books (an average of seven books and $14 per year) had major effects on their achievement test scores. This finding validates my notion that our problems with school achievement are mostly rooted in kids not reading anymore. The effects rivaled the well-substantiated effects of Head Start, which costs one heck of a lot more. I’d love to see long-term follow-up on this experiment’s subjects.

The details? Harvard economist Roland Fryer Jr. ran a randomized experiment in hundreds of classrooms in Chicago, Dallas, Washington, and New York City. The programs differed, but students were rewarded for academic achievement (good grades, good test scores, etc.) or for various kinds of behavior (good attendance, not fighting, reading books, etc.) with cold, hard cash. The measure of success would be how the incentivized kids did versus the control groups on end-of-year standardized tests.

Dr. Fryer agrees that “Kids should learn for the love of learning, but they’re not. So what shall we do? I could walk into a completely failing school, with crack vials on the ground outside [and] fights in the hallways! We’re beyond that.”

I had heard, with instinctive disapproval, about the NYC program but not about the results—which turn out to be quite interesting. Paying for good test scores did not work. Paying for attendance improved attendance and grades, but not test scores. Lots of little rewards for improved behavior of various kinds worked a bit, especially for boys. But, in Dallas, “Paying second-graders to read books significantly boosted their reading-comprehension scores on standardized tests at the end of the year—and those kids seemed to continue to do better the next year, even after the rewards stopped.”

Wow.

Maybe all those crazy elementary school competitions to get kids to read (wherein, if a threshold is passed, the principal promises to go into a dunk tank, or be hit by pies, or shave his head, or whatever) are pure genius. And, given the elemental motivating power of cash (see previous post), maybe offering a cash incentive is not the disgustingly perverse practice I want to think it is.

There was some other interesting analysis, as well, stemming from interviews of the NYC students. They were motivated by the substantial cash rewards they could earn, but they didn’t know how to get there. They didn’t know how to approach the problem of improving their grades, any more than most of us could “solve a third-order linear partial differential equation.” To really change outcomes, kids must know explicitly what to do and must be encouraged to change the things they can control. “The key, then, may be to teach kids to control more overall—to encourage them to act as if they can indeed control everything, and reward that effort above and beyond the actual outcome.”

That, I can buy (pun intended). Anything that spurs children to take control of their lives and stop acting like helpless victims of life is A Good Thing. But that’s another post.

Denial

Well, this was not how I’d planned to begin this blog, but I was struck by something I saw on television last night. It may not be too late where you live to catch this week’s NOVA: Mind over Money. It is about the emotional component to our decisions about money (spending, saving, investing, panicking).

First, they gave the background re Adam Smith’s theory that we behave (at least en masse) in a rational way, leading to the “efficient markets hypothesis,” the near-religious faith in a free market to be self-correcting, all those Nobel Prizes for the (University of) Chicago School of economic theory, and the takeover of Wall Street by the “quant” math majors with their elaborate equations that purport to predict how the market will behave.

Then, they reviewed lots of experiments showing how unconscious and clearly irrational much of our decision-making actually is. Anyone who listens to the financial media try to explain the reasons the market was up or down on any given day will certainly appreciate the emotional side of buying and selling. PET scans show that the (completely subconscious) reptile brain lights up at the prospect of food, sex, and money — causing us to behave in ways we do not control and only rationalize later.

The theme of the show, to me, was that the quants and their economic school had way too much faith in their “science,” their “intellectual edifice built on the notion of rational decision-making.” Interspersed throughout the show, there were interview segments with three U. Chicago economists who seemed, to me, in absolute denial that their life’s work might just be all wrong in its conclusions. One railed that emotions and (market) bubbles just “make no sense!” Uh ... exactly. Another said that what others called a panic (the 2008 market free fall), he saw as “a change in taste.” They simply can’t face the fact that “irrational exuberance” might be both real and more important than their equations ... and cause for market regulation to protect us all from it.

As a terminally rational person myself, I understand the desire to think of life, the universe, and everything as non-random and susceptible to analysis and explanation. But I also think we must be prepared to live with uncertainty and unknowns, because it is more damaging to think we have all the answers when we don’t.