Peter T. Leeson


On his book WTF?! An Economic Tour of the Weird

Cover Interview of February 25, 2018

The wide angle

What’s the dumbest social ritual you’ve partaken in? Fraternity hazing, perhaps? Or maybe debating a lunch mate over who gets the privilege of picking up the tab? How about pretending that the style of eggs you had for breakfast is must-share news for social media?

Not bad—those all seem pretty dumb—but take a moment to ponder these beauties: Deciding criminal defendants’ guilt or innocence by seeing how their hands react to being plunged into a cauldron of boiling water. Consulting a poisoned chicken to decide how to behave toward your neighbors. Adjudging land disputes by having litigants’ legal representatives club one another before an arena of spectating citizens. Each of these practices lasted for over a hundred years—sometimes hundreds of years—and they’re just the tip of humanity’s seemingly-stupid-social-ritual iceberg. Kind of makes posting your croissant on Facebook seem, well, reasoned.

So what’s the deal with the silly stuff people do? How do we explain it? Are people just dumb—pardon me, “irrational”?

That’s one theory, and it offers the kind of excuse that’s easy to reach for when we encounter practices that strike us as stupid: People behave in ways that seem senseless because people are senseless. There’s even scholarship to make us feel better about thinking this way—experiments involving coffee cups, college students and “games” of this or that, which suggest that people aren’t so great at making decisions; often, they’re pretty damn bad. Case closed! Right?

Not so fast. Is it so clear that people’s bad decisions are actually “bad”? Are coffee-cup experiments with college students really so convincing?? Could entire societies, for centuries, have just been banging their collective heads against the proverbial wall???

Call me irrational, but I vote no. People make plenty of mistakes—just flip through an old family photo album for proof. And sometimes the institutions people develop are downright destructive—a fact worth remembering as we mark the hundredth anniversary of the Bolshevik Revolution. But the same species built the ancient pyramids, created the common law, and gave us Game of Thrones—our species.

There’s another theory—one that explains mankind’s seemingly senseless social rituals—and according to it, lurking beneath the craziness, there’s actually a good deal of sense. I call this theory “rational choice,” but don’t get hung up on the name. “Rational” doesn’t mean omniscient; it doesn’t even mean well-informed. It simply means that people have goals, which they pursue as best they can given the limitations they face. In this alternative theory, those limitations—the particular features of people’s environments—account for their practices that sometimes seem stupid.

The particular features of people’s environments shape the incentives they face, and the incentives people face shape their behavior. At root, rational choice theory is just about thinking in terms of these incentives—thinking “economically”—and this is the approach WTF?! uses to find the sense in seemingly senseless practices.