The production tour for this week’s program with Paul Zak was rather circuitous. After Krista’s interview in late March, schedules and time lines became hectic and we had resigned ourselves to the fact that it wasn’t going to make for an hour-long production. A couple months later, Kate, our managing producer, asked about the interview and thought it was worth reviewing with fresh ears. Fortunately, she did, and we now have a program.

With all the interesting information about trust and oxytocin influencing personal financial decisions, Paul Zak’s statement about “the cleansing effect of recessions” prompted more questions for me:

“Economists talk of the cleansing effect of recessions. So recessions are necessary because they kind of cull out the companies that are not providing the best customer service, that are not making a profit, that are not providing some product or service that people need. And when those businesses go out of business, then those resources are redeployed to more important uses. The machines are reused; the people get different jobs. And so this keeps the economy kind of efficient. We don’t want to kind of limp along and have high levels of inefficiency just because we love the name General Motors or love the name of some company if they can’t kind of keep up with the herd. So competition drives that and that’s an important part of maintaining efficiency.

But I think the same thing can happen in individual lives. I think as we get towards the end of every boom period, today or two years ago, the end of the 1990s and dot-com bubble, the end of the ’80s and this kind of “me,” “greed” generation, I think we do get out of whack because human beings are adaptable and we are watching what other humans are doing. We also become adaptable to this sort of yuppie, ‘more stuff for me’ lifestyle.

So I think, from a spiritual perspective, that recessions are also cleansing. So I think it’s very important that we don’t shy away from recessions and we don’t try to outlaw them. I think we should say, ‘Hey, there were excesses. This is how the excesses are corrected. And the excesses were both kind of on the macro level and even perhaps in my own life. Maybe I got a little over-excited about the extra bonuses I was getting and the bigger car. And now I want to sit down and reevaluate what’s really important to me.’ So I think there are great analogies between the micro and the macro, and we should embrace that.”

These are bold statements that have implications. So, after our final editorial session, I suggested that perhaps Krista might ask Chris Farrell, APM’s resident expert on economics and all things financial, for a broader perspective on the field of neuroeconomics and its place within the larger world of economics. And, more explicitly, Krista asked Chris about his view of Zak’s perspective on moments of economic and moral “cleansing.” Chris’s historical and critical analysis I found helpful, and surprising.

I’m not sure if there are absolute right or wrong answers to this final point, but there are consequences. How do you think about this?

Share Your Reflection



Thank you for introducing Dr Zak in the "Speaking of Faith" program. I believe it's right place for a person of such conviction that his personal success (at any cost) is of such importance to humanity. I have no doubt that he is right that a "stress" is an opportunity for a person and a society, but I'll feel better if he gives away his job, his property, his house, his health insurance and comes back in several years to report his new findings. Although I am impressed by the strength of his beliefs in our society, I must present my own belief (actually based on knowledge).
Dear Dr Zak, there is a difference between propaganda (look up the word) and reality (look up the word). We don't live in a democracy - we live in a plutocracy. You believe in our legal system, fine. But there is reality.
This and similar conversations terrify me. American science gave the world negative eugenics and a number of similar treasures in the past (my favorite "Many Negroes are mentally ill, because they clearly dislike slavery," a psychologist, 1858?). Now, we are exposed to various neuro .... which more often then not pretend to be science. Not all innovations are wonderful, Dr Zak (look up such words as "history," "communism," "fascism")

The current financial chaos in the world has created a figure of speech in which opposite or contradictory ideas are combined: “moral market, the science of trust, neuroeconomics, behavioral economics, business ethics,” and others.

Knowing beforehand this is a human behavior to understand what is going on with the economy mainly - not only with words but with actions – we have to make a decision for the well being of humanity and my own.

Living differently in this approach to the global crisis does not require understanding of the contradictory terms. They sound interesting; but, they are not making any real contribution to the change we are advocated now. Changing terms to overcome bad times is like changing religions to search something it must be always unchangeable: Trust.

When is enough enough? How much we trust? Who knows how much human damage is being wrought? No clue for people who are supported for a job, family, health, government, or any other extrinsic structure. It is in the middle of failure and catastrophe when trust is real; it is only in the throes of depression when people trust in them or in their medication; only with the harassment of enemies, when we go to that existential emptiness to love or destroy them. In the midnight or deep darkness we know who is who.

Recycling our words to keep this world running, giving to the brain the responsibility of something that is indeed not common sense, deploying material energy, businesses, and people to the illusion we are creating efficiency, is confirming we have a boner. Trading ethical values: trust, dignity, compassion, happiness, freedom, peace, and well being is the only way to transcend a body that only eats food for the brain.

So many words, so little sense.
Among many things ....
"Trading ethical values: trust, dignity, compassion, happiness, freedom, peace, and well being ..."
Very few words in this list are ethical values.

Yes Anna, because words make not sense to ethical values, but actions. Living together. Do you want to live with me and trade with you what I said? It is the only way to know if they make sense to you. Knowing about each other is indeed sharing our thoughts and routine.

We are not living together in this world today. It is not how we are doing in our jobs or lives today: something is wrong, and that is in us. We don't really care about ourselves: do you really care about me? That is the best way to take care about you. But all that “nonsense words” start first in an ethical egotism inside you and inside me. From that point, we will trade each other our ethical natural values.

Even though I am a very nice educated ethical person, I do not have a job, health insurance, friend, family, or where to go after last 15 days from today. I will lose my apartment, my few belongings, my credit, and maybe 2 or 3 hours of sleep. But I have my trust untouchable, my happiness, my freedom, my peace, and the reality that my life is thankfully supporting them, and supporting you, whether or not you want.

Well. “Are you going to teach us how we ought to live our lives?” No, not at all. This is a personal reflection. I am going to listen to you, thinking about what you say, and make any final judgment. Of course, I recognize we are all mortal humans. Every individual has already made a faith commitment to believe what he thinks is the spiritual life or the thought that is supposed to direct her life. Survival is the main ethical way that instills human ethical values. It indeed shows the individual’s intentions and state of heart and mind in the moment of the action. It comes from within.

"Do you do anything to get food?" The question has less to do with questions of right or wrong than with question of survival. How we respond to life events is what determines the moral content of our acts. Unless we know by empathy the moral content of others’ actions and the full range of circumstances, we cannot judge the ethical reality. If we are not ready to connect with others to some extent and see the impact of our human relationships, then we are limiting our means to discriminate between right and wrong.

Often we find a big gap between the real world and our vision of one ethical world. The troubled atmosphere we breathe in the planet today does not require a specific example to conclude the world is declining. Ethics is an eclectic model to overcome the chaos of judgment implied in every crisis. However, if we just mention the 2008 global economic turndown, it indeed pushes the ethical age to the forefront. "Does the free market corrode moral character?" No. It corroborates what ethics means: human dynamics and relationships; nevertheless, ethics generally connotes doing the right thing. Hence, unethical behavior destroys our trust and dignity.

“The human mind has enormous ability to adapt to what a subsequent generation would come to refer to as "stress” and also a powerful homeostatic capacity” (Allyn and Adele Rickett, 2008).

Neuroeconomics and cleansing together sound to me like “brainwashing.” How do we put our trust and life’s dignity in a “moral molecule”? Even though the human evolution is correlated between science and faith, the assimilation of our survival is both intrinsic and extrinsic. The human inclination towards moral behavior is intrinsic motivation. Yes, it starts in the human limitation of the brain: 5, 10, 15%?

Markets are human creations, and human creations are created by human evolution to the high of a human term: God. If god is a human creation, it dwells in the brain or DNA. Motivation then is like food or protein for the brain.

“Come on! Ogethics. You are almost being homeless. Come down to the real world: what can be the motivation for you, without money and nothing to eat? Don’t even think to say trust or dignity!” Well. “Of course it is food and water.” Common sense logic in most people can say that, but I am not sure that happens in me yet.

Am I connected with God? Or just ready to be disconnected from the G concept, and live in a vegetative existence, without the G-brain imagination? Could I develop a state of paroxysm and feel nothing when obligated to crossing that physical limit beyond my control?

How these homeless people can survive in the middle of such as stress and ignominy?

Is it possible that I can make the unknown connection in my brain, and find some motivation to live without food and water for 6 perhaps 10 days, and not allow it to kill my faith, my ethics, my God? A sacrifice? Negligent suicide?

I do not know. It threats to be cruel, crazy, ridiculous, and around the corner.

Ethics must not be a choice between unpleasant alternatives. Ethics must be right within the perspective of being human. No dilemmas. Ethics does not depend on any situation, but ethical dilemmas depend on the circumstances.

That is why we are living in an ethically complex, grim, and relentless world which needs a vision of utopia to instill in its inhabitants a belief in ethical schemes for idealistic or utopian people; visionary schemes for producing perfection in human conditions and limitations. We are not perfect due to our human nature. What some people ignore is that when we do the right thing we are extending our human limits and expanding consciousness to the way of perfection even though it is impossible.

Everyone knows perfectly well that our own efforts are never going to bring us anywhere near perfection. On the other hand, we must realize from the outset that the goal towards which ethics is beginning to guide us is absolute perfection or utopia.

No power in the whole universe -- except us ourselves -- can prevent ethics from taking us to that goal. We do not need to do the impossible; we just need to obey the ethical law inside us once it is discovered.

“The oxytocin influence is "a remarkable finding," says neuroscientist Antonio Damasio of the University of Iowa College of Medicine in Iowa City in an editorial published with the new report. Damasio had previously argued that the hormone acts somewhat as a love potion. ‘It adds trust to the mix, for there is no love without trust,’ he says. Worries may arise that crowds of people will be sprayed with oxytocin at political rallies or other events to induce trust in speakers, Damasio notes. However, he proposes that slick marketing strategies for political and other products probably already trigger oxytocin release in many consumers (”

I listened to the Zak interview with a mixture of horror and fascination.

Over-looked in this discussion of whether a recession is cleansing (one could make the horrific argument that Katrina "cleansed" the city of New Orleans) but also the notion that one should do acts of charity because it makes you feel good about yourself.

The story of the adopted pet is illustrative. Yeah, it is a good thing to take in an animal in need of a home--and yeah, it is easy to feel good about helping a sweet "innocent" animal. But there was no mention of the family who had to give up their beloved companion due to homelessness. No mention of what he and his family were doing to help this family get back on its feet. There was no sense of having had to sacrifice anything in this gesture (and actual sharing requires that you relinquish something) and I don't get why he defines that action as altruistic. Rather it sounds like a cool hip way to get a new pet for the family. My intuition tells me that this "science" of neuro-economics has the capacity to be just as deluded and dangerous as the idea that all markets are rational and fair.