Neuroscience versus Psychology

Here is an article about Neuroeconomcis - the mixture of neuroscience and economics. Neuroscience is becoming increasingly popular nowadays, although this term is frequently used as a politically correct substitute for "psychology" - the subject that is inevitably associated with Sigmund Freud, sexuality, and the dark forces in our mind.

A few words about Freud - subject that I have been interested in for some time, but has not written about so far at length. (although by saying "Freud" I will refer not only to him, but to the host of people who worked in the same time with him, as well as to those who have developed the psychology throughout the XXth century.)

Sexuality
People feel wary at the only mentioning of the Freud's name - allegedly because our impluses obviously cannot be reduced to sexuality only. In my opinion, the word "obviously" should make a scientist shrug his/her shoulders, and Freud himself later added "aggression" as another driving force for our behavior - he was motivated to do so by witnessing the mass slaughter during the World War 1 - something that we still attribute to the faulty actions of a few people, but what Freud himself saw as millions of people voluntarily taking part in these actions.

More than sexuality
In reality, the opposition to Freud stems from more than just the displeasure with his ideas about sexuality. His research showed too conclusively the dark side of the human nature. He exposed how we use the pretenses of "goodness", "morality", "social justice", "fairness", etc. to achieve our selfish goals. He did not shy from directly attacking the religion, the state and the society - no surprise that nowadays, a hundred years later, he still has so many enemies.

Subconscious
Some of the breakthroughs made by Freud and co-workers have been so firmly internalized by the modern culture that they are not anymore attributed to him. For example, we freely and casually speak of subconscious. However, a hundred years ago the idea, that our thinking is not limited by our consciousness and that our decisions are not always rational, met a lot of opposition and scepticism. Freud would be greatly amused by the fact that in the beginning of the XXI irrationality of human behavior comes as a surprize to some very educated people: here is the statement from the article that I linked above

"Much of modern economic and financial theory is based on the assumption that people are rational, and thus that they systematically maximize their own happiness, or as economists call it, their “utility.” When Samuelson took on the subject in his 1947 book, he did not look into the brain, but relied instead on “revealed preference.” People’s objectives are revealed only by observing their economic activities. Under Samuelson’s guidance, generations of economists have based their research not on any physical structure underlying thought and behavior, but only on the assumption of rationality."

However, Keynes, who himself lived in the times of Freud and was possibly familiar with the Freud's ideas, was more cautious:
"John Maynard Keynes thought that most economic decision-making occurs in ambiguous situations in which probabilities are not known. He concluded that much of our business cycle is driven by fluctuations in “animal spirits,” something in the mind – and not understood by economists."

Neurology versus psychology
The ideas about suconscious and other features of the mind functioning were however grounded in a much more basic fact demonstrated by Freud: many psychological conditions resulted from the "software" rather than from the "hardware" mulfunctioning. The evidence of that was totally scientific - one of the examples, studied by Freud himself, was that of the "glove amnesia" - the complete loss of sensation from the wrist down. Freud, who himself was trained as a neurologist, was quick to point out that this phenomenon could not be explained as a physical mulfunctioning of the brain, since the receptors of the neuron cells extend all the way from the brain to the wrist, and the mechanical damage somwehere in between would paralize the whole arm, rather than only the wrist. Another example was the heavy psychological conditions common during World War 1 among the people who survived a shock, but were physically unharmed.

You can now imagine with how much dismay would he learn that in XXI century we are still trying to explain our complex behaviors and motivations by comparing our brain cells to transistors and discussing how these transistors are "wired":
"Yet it is likely that one day we will know much more about how economies work – or fail to work – by understanding better the physical structures that underlie brain functioning. Those structures – networks of neurons that communicate with each other via axons and dendrites – underlie the familiar analogy of the brain to a computer – networks of transistors that communicate with each other via electric wires. The economy is the next analogy: a network of people who communicate with each other via electronic and other connections.
The brain, the computer, and the economy: all three are devices whose purpose is to solve fundamental information problems in coordinating the activities of individual units – the neurons, the transistors, or individual people. As we improve our understanding of the problems that any one of these devices solves – and how it overcomes obstacles in doing so – we learn something valuable about all three." 


Disclaimer: I am not aware of how much Paul Glimcher, whose research is described in the article, and Robert Schiller, who wrote it, know about psychology. It might be that they know it much better than me, but the article is deliberately written for the benefit of the average reader... or with the goal of not mentioning the toxic words "Freud" and "psychology". It is the lack of knowledge among the average public that bothers me.