John Kenneth Galbraith Quotes

Economists think about what people ought to do. Psychologists watch what they actually do.

We do not always act the way economists think we should, mainly because we're both less selfish and less rational than economists think we are. Economists are being indoctrinated into a cardboard version of human nature, which they hold true to such a degree that their own behavior has begun to resemble it.

Economic theory does not work with human beings. We are far too messy.

Tastes and behavior are important in economics. Nobody denies that. But the question is: How much of behavior is irrational, and how much of the irrational behavior really affects prices? It turns out that's very difficult to answer.

That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.

We accept that people are irrational for good Darwinian reasons. But I don't think we should be so pessimistic as to think that therefore we're forever condemned to be irrational.

Behavioral economics can explain some things, but it's hard to explain a lot of the underlying processes that generate these decisions, much less some of these unconscious things that we don't have a handle on at all.

Who should know better than a cosmetician that human beings are less than rational creatures?

I always believed in animal spirits. It's not their existence that is new. It's the fact that they are not random events, but actually replicate in-bred qualities of human nature which create those animal spirits.

Fear and greed are potent motivators. When both of these forces push in the same direction, virtually no human being can resist.

There is much evidence that people are not rational, in the economist’s sense; nor do they take into account expectation, in the precise interpretation of that word. As a result, economic theory often does not correspond with what happens in the market. Some would argue that we need descriptive economics. I would argue that all should be taught about probability, utility, and MEU (maximization of expected utility) and act accordingly.

The left-brainer and the economist in me says watch what people do, not what they say.

The notion of humans as inherently rational beings has been not only trashed in economics, but trashed in all the best research on moral decision-making.

Humans are hard-wired to be irrational when it comes to financial decisions. We must understand that so we don't become the sucker at the poker table.

The human animal varies from class to class, culture to culture. In one way we are consistent: We are irrational.

People in this world are not often logical.

You will find that reason, which always ought to direct mankind, seldom does; but that passions and weaknesses commonly usurp itsseat, and rule in its stead.

Political Economy or Economics is a study of mankind in the ordinary business of life.

Once we know that people are human and have some Homer Simpson in them, then there's a lot that can be done to manipulate them.

How should the best parts of psychology and economics interrelate in an enlightened economist's mind?... I think that these behavioral economics...or economists are probably the ones that are bending them in the correct direction. I don't think it's going to be that hard to bend economics a little to accommodate what's right in psychology.

Looking at the stock market to understand the economy is like studying a manic depressive in order to understand human nature.

I try to teach people to make fewer mistakes. But in designing economic policies, we need to take full account of the fact that people are busy, they're absent minded, they're lazy, and that we should try to make things as easy for them as possible.

Economists discount any factors that would not influence the thinking of a rational person.

'Freakonomics' began with a 'N.Y. Times Magazine' profile I wrote about Steve Levitt. I was working on a book about 'the psychology of money,' and since Levitt's an economist, my editor thought I'd be the guy to write about him. Fact is that Levitt has almost no interest in either psychology or money.

In the 1940s, economics started getting highly mathematical. It was basically because economists weren't smart enough to write down models of real behavior that they started writing down models of highly rational behavior - and they kind of forgot about humans.