It has become fashionable to declare that the crisis has sounded the final death-knell for the dubious idea of ‘rational economic man’. One Spectator columnist argues ‘Homo economicus is a flawed way of thinking. Man is not, and never has been, a purely rational economic actor’; it concludes ‘We need the insights of behavioural economics if we are going to chart a way back for the economy’. We are told breakthroughs in human psychology and neuroscience show ‘how real people actually behave’. A recent feature in the Economist argues Darwinian evolutionary psychology can explain the ‘herd’ mentality of bankers and house-buyers, when ‘everyone instinctively feels compelled to copy the others, rather than making an independent assessment of the situation’. This approach is now so mainstream that long before the recession set in, proponents of a behavioural approach - such as Daniel Kahneman and Vernon Smith - won the Nobel Prize in economics.

Critics argue that this emphasis on psychology naturalises economics, consigning economic decision-making to the sphere of flawed ‘human nature’. Do Darwinian approaches put economics beyond political debate, or might they inform better economic policy? Can blaming the behaviour of bankers or blaming ourselves lead anywhere other than to the conclusion that the crisis is ‘our fault’? What does the prevalence of behavioural and psychological explanations for the crisis tell us about contemporary culture?

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