Making changes represents abandoning the known, but our brain resists the unknown. It interprets a danger to
survival, that is the reason why change is not so simple.
The Great Crisis of the 1930s undoubtedly marked a
before and after in economic theory. The world went into a very deep crisis,
the levels of unemployment and marginalization spread everywhere, and the
mechanisms of market adjustment that previously worked, now seemed not to work.
At that time reigned in the academic
world the theories of classic and neoclassical, as A. Smith, D. Ricardo, A.
Marshall, S. Jevons, among others, and very few dared to discuss them.
The neoclassicals always argued full employment
for all factors of production, arguing that if the economy was slow to reach
its equilibrium, it was because of the existence of unfortunate government
interventions or by monopoly powers (also the fault of the state), which
prevented the correct functioning of the competition. And while these theories
were logically well formulated (given their assumptions), they fell into a certain discredit to explain reality, given the
political-institutional rigidities that prevent the rapid adjustments needed by
the neoclassical model. It is in this context that it appears on the scene of Keynesian theory, as a new way of
thinking about the capitalist economy and government intervention, with its
policies of moderation of cycles, fiscal and monetary policies.
But
what is the reason for so many rigidities that hinder the free and rapid adjustment
of the markets? Why governments do not eliminate them? And even more, why people
do not ask politicians for their elimination? From the point of view of Cognitive Neuroscience, the answer is simple: human brain
seeks assurances, predictions and rigidities that keep it in neuropsychological
equilibrium, that is, the opposite of the rapid change needed by neoclassical
models to work properly. In this way, there
is nothing better for the human brain than the gradual Keynesian change, at
least for the brain at its current stage of development.
Remember
our brain has not had time yet to adapt to the rapid and permanent change. Society
changed recently. The boom of discoveries and technology that fosters these
permanent changes has only recently appeared with force at the end of the 20th
century. There has not been time yet for
our brain to adapt to so much accelerated change, despite liberal
economists opinion.
Basal Ganglia and Aversion to Changes
One of the most important findings for
Neuroeconomics has to do with the role
played by the basal ganglia and the functioning of memory in the natural human
aversion to changes. The basal ganglia are responsible for prioritizing the
options that led us to success in the past, instead of exploring new alternatives.
This explains why we tend to stay in the comfort zone, repeating old patterns
that already had good results in the past.
And while the brain's neuroplasticity (its ability
to create new neural connections) allows for the potential to adapt to changes,
the human natural tendency is still towards slow changes, or toward "no
change". In this way, our political
and worker union institutions play in that sense, as a reflection of our
natural tendency not to change what is comfortable, endowing the whole cluster
of Keynesian and institutionalist rigidities of neuroscientific sustenance.
In summary
Our
central nervous system has millenarian structures that reject change. One of them,
for example, is the brainstem, where the so-called basal ganglia are. There are
the behaviors that we have learned and, one of its characteristics is “neophobia”,
that is, fear of the new. This is one of
the most powerful fundamentals of Keynesian rigidity and resistance to change.
Therefore, anxiety
and stress are the tip of the iceberg of the response of a nervous system
(central and peripheral) that is not yet ready for rapid changes. In this
way, the pleiad of gradualist institutional rigidities that politicians love
(and which liberals hate so much), are those that Keynes understood perfectly a
century ago, to generate a new economic vision.
Author: Sebastián Laza (Economist, MBA, Specialist
in Applied Cognitive Neuroscience to Organizations)
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