The use of heuristics in political and economic contexts
Ollie Monblat
Introduction
Heuristics have proved both a blessing and a curse in the last few decades. On the one hand, they have helped give rise to the globalized, oligopoly dominated society that has characterized the 21 st century, with firms’ increased understandin g and use of these phenomena contributing greatly; on the other hand, they have offered an effective time-saving tool to navigate the increasingly murky world, and helped individuals conserve energy in demanding and relentless environments. Moreover, and far more recently, they have offered insight in several policymaking fields, and provided more effective, less expensive tools to encourage, or discourage, behaviours in order to maximize social welfare. This essay will explore many of the major roles heuristics have played in shaping the world, both in their successes and failures. However, it cannot claim to be an exhaustive study. The breadth of content has been limited by a lack of academic literature, where studies on the effect of the use of heuristics had not been conducted, or were insubstantial, which was particularly the case in relation to racial and gender prejudice, making their integration a significant challenge. It has also not been possible, for reasons of space, do discuss the potential uses of heuristics in computing and AI, law, and macroeconomics. Nor will the essay pass any form of ethical judgement over whether this manipulation of heuristics is justified or fair on individuals, as this would take us into philosophical discussions of free will and agency, for which there is no time. At worst, this essay should offer an insight into the psychological operations of the human mind, and at best, it should provide a comprehensive and convincing argument that, far from being a shackling behemoth of irrationality, heuristics are a force of positive influence in the world, offering effective, practical solutions to individuals and policymakers alike, despite the many problems to which they have contributed. In order to consider the wider effect of heuristics, and the uses and abuses of them in a political and economic context, it must first be laid out what heuristics are, how they function, and how they affect decision-making. To explain this, it is important first to understand how current psychology approaches the mind, and to offer a simplified navigation of the maze of processes and associative functions that emerge from the trillions of neuron interactions occurring each second. Rather neatly, the outcomes of these interactions and processes have been divided into two categories, those of ‘System 1’, and those of ‘System 2’. 1 Although in reality, these systems overlap, for simplicity, they can be largely considered to operate distinctly. The former represents the unconscious, or at least, involuntary or passive mind, and the latter forms the active and thinking mind. System 1’s role is to process the outside world in all its chaos, and present suggestions, ideas, views, thoughts, experience of physical phenomena, all unconsciously and with negligible effort (though it cannot be switched off). System 2 is much the opposite. Its job is to moderate all the content and suggestions which System 1
1 Kahneman, D. (2011) Thinking, Fast and Slow . Penguin.
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