After almost a century of mathematical obsession, economics as a discipline has finally started to accept its emotional roots. Dr. Kahneman 's work revealed that emotions drive many decisions made under conditions of risk or uncertainty. So, what decisions are made with total certainty? Clearly emotions play a major role in economic decision making, and in fact this goes back hundreds of years.
The Philosopher Thomas Hobbes (1588-1679) first described pain and pleasure as primary drivers of economic life back in the mid-1600s. Throughout his writings Hobbes often stressed the role of pleasure as the prime mover in human action, describing the “future hunger” for pleasure as the primary determinant in human behavior. Many other philosophers soon joined Hobbes in examining how emotions impact the political economy.
Taking the view that pain, not pleasure, is the prime motivator of human action, the influential political economist John Locke (1632-1704) spent many years describing and discussing how pain drove individuals and states to action. Starting with his second edition of the Essay on Human Understanding (1694), Locke described an “uneasiness” that spurs humans and governments to action.
Kahneman's work gave birth, or really re-birth, to the field of behavioral economics. The interesting question going forward is how will new neurotechnologies that enable humans to change their emotional states impact economic decision making?
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