The premier technocrats of our age, neoclassical economists, are poorly equipped to balance homogenizing forces against heterogeneous ideas, as economists altogether ignore agents’ ideas. They do so by attributing to agents the automatic ability to act optimally, effacing the agents’ need to interpret their circumstances and thus the possibility that the ideas on which their interpretations are based will be mistaken. An error-free agent—meaning, for practical purposes, one whose interpretation of her circumstances matches that of the economist—is an agent whose actions the economist can conveniently predict. Similarly, attempts by economists of information and behavioral economists to render economics more realistic overlook ideational heterogeneity and the fact that ideas must form interpretations before they can guide actions. Thus, the agent depicted by these types of economist remains predictable despite the information asymmetries and putative irrationality identified in these literature. Even the recent shift toward empiricism in economics relies on an undertheorized positivism that, again, ignores the causal force of ideational heterogeneity. Nontechnocratic research in social psychology, however, suggests that the neglect of people’s ideas is not unique to economists, posing a wider cultural problem for technocracy—but also the hope that ideational changes might lead to a judicious form of technocratic governance.
Do investors value frequent issuers in securitization?
