The charlatan Sedlacek?

One recent article by Tomáš Sedláček is full of elementary mistakes that a "great popular economist" should not make. They are perhaps not acceptable even for a first-year university student.

Tomáš Sedláček
Tomáš Sedláček

Imagine the following situation. After a delicious Christmas dinner, you move to the living room, hand out presents, treat yourself to a cup of coffee or sherry and want to bring the relaxed Christmas mood to a sweet end, so you stand in front of the whole family and end your celebratory speech with the words: she was so excellent, mom, that I give you a thousand crowns here for her! No, a thousand is not enough, it was really great and you had to spend a long time preparing, so fifteen hundred, here's your mother - thank you! ”And you pull the appropriate amount out of your wallet on the spot. What would happen? My mother would certainly burst into tears: not gratitude, but shame.

Mr. Sedlacek it in one of his articles he considers it a paradox, something special. It describes the thesis of the American behavioral "economist", who in this case shows that people are (according to him) irrational, sometimes even intentionally and predictably.

Messrs. Ariely and Sedláček base this thesis on the fact that people behave differently on the market and differently in personal relationships, "in society". While in the first payment is normal for us, in the second environment we (allegedly) reject it.


Dr. Sedláček should probably return to school from lecturers at the Charles University. I also know (and that's something to say) that Mr. Sedláček (and also Ariely) is wrong.

If Mr. Sedláček pays his mother for money for Christmas Eve dinner, it's his business. Even if he didn't, he would be rational. The question of rationality is a subjective question: we each have your own rationality. The rationality that arises from our personal preferences, from our personality and from the given situation. Sure, I'm used to paying for food in a restaurant, for example, and I wouldn't think of going to a restaurant after a payment and washing dishes after payment. It's my personal preference, I want to pay for the service. If I were given the option to "pay or wash the dishes", I would choose the first option.

On the contrary, I wash the dishes for my parents. I even respectfully thank you for that food, I'm decent to my mother, and even if the food isn't exactly fine, I won't change my behavior. Am I paying my mother? Definitely yes. Do I behave (even in the case of bad food) irrational? Certainly not. I care much more about my mother's satisfaction (about her good feeling from cooked food) than about satisfying my taste buds. I'm still rational. However, if I behaved differently, I would be rational anyway.

Simply put, there is no objective rationality. But should Mr. Sedlacek know this, or not?


Mr. Sedláček makes another elementary mistake in his interpretation of egoism. He writes that people who pursue their interests are selfish. However, because many people do not just pursue their interest, they are not all selfish, so they do not maximize their benefit and are therefore irrational. Again, social relations are said to be guided by a kind of irrational mechanics.

Dr. Sedláček would say about me that if I want to help my mother wash the dishes, even though I don't get the money for it, I'm irrational because I'm not behaving so completely rationally and I'm not maximizing my benefits. But this is nonsense of absolutely monstrous proportions.

People have some interests of their own. Only these interests rank on an imaginary scale from a completely selfish region to an "altruistic region". No matter how one behaves, one always pursues one's interest, one's own well-being. First there is that self-interest, and then there is the division into egoism or altruism. What Mr. Sedláček wrote does not apply:

"Economists mostly believe that the engine of society is selfishness, ie the preference for a clearly defined self-interest."

But it is true that the "engine of society" is the pursuit of self-interest. That's all! Own interest may be foreign benefit.

That is why I do not see anything strange about what Mr. Sedláček is surprised about:

"They came out posthumously this week History of economic theories, amazing book doyena of Czech Economics by Professor Milan Sojka, whom everyone liked. That's why many people, mostly economists, have been involved in publishing this gem without expecting any compensation. If you told us that we did it for selfish reasons (money, visibility, etc.), you would probably offend us. At the same time, why should we feel offended if, in our opinion, egoism is such a normal and strong motive? Because there are things we want to do for the good (of our loved ones or anyone else) and essentially we do not want to be paid or otherwise rewarded for them. Selfless moneyless donations are simply a very strong motive that we want to keep and where we do not want to let economic thinking fiercely. "

This is a completely rational and extremely "economic" action.


Sedláček (and Ariely) in the given article builds on several completely obvious economic delusions. Rationality is objective, payment is only made in cash, a rational person is an egoist who wants to have a lot of money, and economics is the science of money.

It is these myths, which are so detached from reality, that cause a large part of people to see in economics not science, but quackery, the "paved." These and similar myths must be refuted. It should be pointed out that economic theory does not say anything like that. That the myths in question are completely at odds with the axioms of economics. Only when we can do this will the economy gain a firm foothold in the perception of itself by science.

However, those myths are relatively difficult to refute when one of the most popular economists builds his theses and reflections on them. However, for our consolation, it should be noted that he makes not only the charlatan of all of us who are involved in economics, but also of himself.


  1. I have the impression that this is a dispute over words. Sedláček uses the word "rational" in relation to the actions of a person thinking only in the intentions of financial costs and revenues, which contrasts with the actions of "irrational" or emotional, based on non-monetary values.
    If, in your opinion, every action is rational and therefore is actually just an action, then you still need additional criteria to somehow distinguish between different types of action. For example, reasonable x emotional, etc.
    If every action pursues a benefit, and that benefit may be a failure to observe the benefit, then such a statement loses its meaning, which has already been said in other words.
    On a more philosophical level, it can be said that man is no unit. In fact, one does not know what and who is, so he observes the benefits of what he is just identifying with - bodies, social roles, etc. Perhaps it could be said that these things pursue their benefits through man 🙂
    Well, economics doesn't have an easy role to play 😀

  2. Dear young man, if you think about your relationship with your parents "economically" in the categories of "services" (cooking) and "payments" (washing dishes and decent behavior), then although you probably don't realize it, there is something fundamental wrong with your family relationships . I don't want to have a son like that. I'm sick of that idea. He would rather irrationally like someone who will like me, and what he will or will not do will be from this "feeling" rather than a "payment." …

  3. Kvothe: Hello. Offensive? This article may have, it was written under the influence of emotion after reading and eager discussion of the article. But otherwise it is not the intention of any of my articles. 🙂

  4. to Lukáš Kubec:

    I have nothing against you, you have interesting opinions, whether I agree with them or not, but it seems to me that you write too offensively.
    Your style is offensive.
    I just want to ask if you do it on purpose.

    Thanks for your answer

  5. Thus, it is possible to say that, in general, irrationality does not exist, it is an empty set, but it is always present in private action. Rather, I mean that for an economist, it may be subjectively irrational actions of a family that does not pay for service, and for a family at the time, it may be irrational actions of economists who would rationally pay for service. Thus, it could be said that irrationality and rationality exist only in a given moment, in a given place and in a given situation, because they are connected relatively to individuals or groups of people. Neither irrationality nor rationality can exist without society. This would modify the first statement that, in general, irrationality does not exist, because in this sense there is nothing like rationality and irrationality without man at a given moment. Structuralism might say that without the existence of rationalism, there can be no irrationalism, because words do not denote objects, but the differences between them. The difference exists in the current conception of the individual, but rationality, like everything, is relative and therefore its meaning changes.
    However, I only write what came to my mind and I am not based on economic publications, so if I am wrong, I apologize :-) I am only human.

  6. stepasite: very nicely written. The saddest thing is that the cheap effort to be an interesting author of this "critique" does not use much rational arguments, and in the end it is exactly what he writes: an irrational charlatan full of selfishness. But he will definitely grow out of it… I used to be like that… 🙂

  7. I would be very interested to know what the axioms of economics are. I can imagine some mathematical axiom, eg from propositional logic. But in economics?

    I would like to point out that economics today is more of a philosophy, where everyone says something, they think they are right, but in reality it may be completely different, if the problem is at all decidable. It usually isn't, and we have to admit that no matter how hard we try, we can't find a general solution / rule. But this is probably a general problem of any social science, which begins with the fact that we express ourselves with the help of a language that is not and will never be accurate enough.

    I'm not telling you to leave those debates (you wouldn't listen to me anyway :), I'm just pointing out that refuting something is quite eighth, and we're going to an area where everything can be confirmed and refuted at the same time. It just depends on the angle of view.

  8. But rationality is action (de facto I do not know the term "rationality", which Mises also writes in his Human Action - I also read this book). As long as it acts, it is rational.

  9. "Ad awareness - still acting rationally His impression that he is acting" irrationally "is for him only an impression, a feeling, a cost, but so small that it does not force him to stop acting (if he continues to act)."

    I guess someone explained it to you here. he only has one, but not rationally.

  10. This is how you see it, I quote:

    "Since no one is in a position to replace the value judgments of the acting person with his own judgments, it is futile to comment on the goals and decisions of other people. No one is qualified to determine what would make someone happier or less happy. ”

    quoted from human action.

    this is the big mistake he prefers not to comment on.

  11. But of course, risk is one of those costs of negotiation. And feelings and feelings have the same role in action as information - they face the action, influence it, set goals and means…

    Ad awareness - still acting rationally 🙂 His impression that he is acting "irrationally" is for him only an impression, a feeling, a cost, but so small that it does not force him to stop acting (if he continues to act).

  12. The cost of action is much more than the risk of human feelings and emotions. these as such have a significant influence on the Austrian school defined rational behavior. based on these feelings and emotions, then one does not act rationally. one can even realize in the present time that what he is doing is not rational, but on the basis of his feelings and feelings he MUST still act. how can he then act rationally when he himself subjectively realizes that he is not acting rationally?

  13. After all, one acts only in anticipation. It is not because> gains benefit <, but because> expects <to benefit. One acts because> expects <the fulfillment of a goal, not because it fulfills a goal. Expectation is not certain - I can expect the goal to be fulfilled (gaining the benefit), but I do not have to achieve the goal at all. In that expectation, however, I act rationally on the basis of the information I have (= knowledge, experience, etc.)

  14. Risk is the cost of negotiations. Learning increases the knowledge on the basis of which it acts.

    "Then do you consider eliminating the mistakes (be careful not regretting) of your supposedly rational conduct, for the only reason that you have achieved the goal? for a simple reason, for the first time you did not act rationally enough. "

    No, I did not do enough management (to achieve the goal), if I still have the same goal, it is rational that I want to correct mistakes. Not that I can achieve that.

    Are stupid people completely irrational? But go…

  15. Lukas is wrong. want and achieve goals are two different concepts. if you do not reach the goal, then you can write about your subjective rationality, in the spirit of saying that I have done everything I know and do to the best of my knowledge and conscience. then why do you consider eliminating the mistakes (be careful not regretting) of your supposedly rational conduct, for the only reason that you have achieved the goal? for a simple reason, for the first time you did not act rationally enough.

    that you raised your mother did not mean that you acted, but obviously not rationally, not according to the demands of the market, your mother, because as I write above, supply did not meet demand. 🙂

    any action in which you do not have the knowledge and / or skills to be called risk and not rationality. the fact that every human brain does not mean that it also has rationality. this is also the example of a mother with a dietitian. rationality is increased by learning and observing, which reduces risks and the goal is always to achieve goals.

  16. Rationality is the desire to achieve a goal, not the achievement as such. So even not reaching the goal (mother annoyed, I'm not happy) means that I acted wrong post ex post, but still rationally. 🙂

  17. correction: not economics is not science, but economics, prepacte and thank you for your understanding 🙂

  18. rationality cannot be subjective or objective. one gains rationality through learning, observation, and the Austrian school will pound the fence under electric voltage until death. when he can't explain something, he hides it behind subjectivity.

    to give an example, I can do a few. if two people are standing next to each other on a small diet and let's say his mother, they both look at the boiling water in the pot on the stove. a small diet reaches for a hot pot and may burn, but he doesn't know it yet. the mother, if she manages to warn him, will protect him, because she knows what can happen. if not, diet will come on its own.

    Likewise, if the diet is played high, the mother tries to put it down, if the diet falls, she will find out that she probably shouldn't have climbed there. The mother also warns her diet not to push iron objects into the brick wall in the wall.

    rationality is based on physical and mathematical laws, foreign sciences. and since the economy is not a science, but a file of 7 billion psychological outpourings, you cannot determine what is rational and what is not. so you will claim that everything is rational.

    you forget that what is rational in the economy and what is not always shows at time t + 1, foreign ex post. mises hid it from the eyes of his supporters in one sentence. I will paraphrase.

    "Everything we do now is a second past, but everything we do now is for the future."

    even that little diet will realize when it touches that hot pot. "Ejjj, I shouldn't have caught this."

    so now i'll put it on a saddlebag example. he considers it rational to pay his mother for Christmas Eve dinner. indications of his step, but probably did not say, I did not feel it. but he can have his mother in financial distress, and so he wants to show his love and help her, because he knows that it was a big bet for his mother.

    the saddler's mother can:

    a) thank you
    b) to be terribly offended and to scold his son.

    after his rational act, the farmer found out after his rational act that he had really acted rationally, based on the above-mentioned objective causes, and that he agreed with his mother and that the money was accepted, rationality became objective.

    if point b) arrives and the mother fires on the saddle like a rocket, the farmer realizes that this was not reasonably, rationally. "Supply did not meet demand", ie rationality remained at the level of the subjective level. the farmer does not understand that what has upset the mother and the mother does not understand how her son, whom she tried to raise well in general, could be attacked.

    so dear young author, I wish you all well for further study of economics, because I feel that you can be a better economist than those we have here now. he just wants time. and time will show that whether I wrote now was rational or not 🙂

    good luck once again.

  19. Hmmm…. I read the cadet from Sedláček, and I felt quite good about it. In the case of his article, I feel like he was just drunk. I'm not really saying this as an insult, but as an explanation of the cause.

  20. Lukáš:
    "I'm not even in college yet (I'm still a high school student yet), but I already know, '"
    - My homage. You have a really perfect knowledge for high school, but especially the ability to see the principles. Just be careful that college doesn't spoil you. Surprisingly - the greatest nonsense is said by any "Nobel" economists.

  21. reflexes are a type of involuntary ~ unintentional behavior, such as changes in blood pressure,…

    re: O'pruz, ekon.axiomy
    people act? :) +
    (economics is a theory :)

    but I would rather talk about the assumptions and axioms of individual economic ideologies, such as neoliberalism / specifically the positivity of competition, free trade and the negation of the positivity of monopolies - this is in conflict, so free o.I will reach the world playing field, which will never be equal, which clearly leads to monopolization, or someone explains it to me / if I'm wrong in the definition so sorry - I always hear about neolib. speak differently

    Otherwise, I agree with Jakub L. + I will emphasize:
    "No matter how you behave, you always follow your interest"
    I see the essential shortcoming of this thesis in the fact that a person thinking in this way behaves differently than a person who is not aware of this above-mentioned relationship. noetic problem, where if you do not take this discrepancy in behavior into account, you reduce the meaning of behavior / it is always dependent on your own interest / does it not happen to you that after more than a few shots of rum you would walk a little differently than you would like? ..etc etc etc

    + I feel that this also implies: interest is the main engine of people's behavior.
    Here it is also important to realize that the interest may be below / not / conscious, however, for example manipulation, the influence of the environment is something else..then also interpersonal relationships, the environment are a priori engines of our behavior / here the evaluation would be misleading, I think + now I don't even know why and what it would be /
    .. ie ie, for example, if you want to help someone, you can't just look at your interest, you should take into account your prejudices, external influences on yourself…

    + perhaps almost unimportant note: shortcomings in terms:
    | thesis does not regulate "experiencing" only "behavior",
    | "Watch… interest" - I don't always take something into account at all..I just behave accordingly, interest can be subconscious you don't follow it, it just affects you
    | I can't know if I'm "interested", I just know it is

    Central regulation of financial markets - this is really a question..according to the theory of regulation, it is obvious that someone will *** / argue about it /,
    because even a partial regulation / eg the EU, let's be optimistic about Rassmusen, very / so it will only prolong the time before all those private equity banks, investment banks, hedge funds, .. get around. despite the fact that the further development of financial instruments / I remind you that black-scholes were officially issued almost 50 years ago: 1973 / not only is it happening, but also the regulation of existing options in general, leads to the search for and creation of new values

    However, I wonder how and by whom this problem will be officially described. It is not just a matter of solving banking markets: the consequences will be strong elsewhere, on the other hand "everything" cannot be solved, I will not solve the problem of Western ethics by political decisions or inability to assess , anticipate risks…
    a person who believes in deregulation should have a scenario for the future, right?

  22. Although with a large time lag, I still ask, please state the "axioms of economics".

    Thank you.

  23. and I try to explain to you that it is the same as the theory of Marxism or any other non-falsifiable theory .. 😀 for example, that the earth was created by a god .. 🙂 it will come to you later what I am talking about.

  24. How do you know how I benefit from the choice - what is the benefit? The benefit is the degree of fulfillment of needs. What are the needs? Etc… etc… What about altruism?

    I write in the article:
    People have some interests of their own. Only these interests rank on an imaginary scale from a completely selfish region to an "altruistic region". No matter how one behaves, one always pursues one's interest, one's own well-being. First is that self-interest, and then there is the division into egoism or altruism.

    Otherwise yes, in this definition the concept of rationality loses its meaning, because rationality = human action. And yes, I agree with that.

    And that it is irrefutable? It is the axiom on which it is based. That it is irrefutable is perhaps correct.

  25. According to this argument, however, every behavior is rational .. it is too much subjectivism .. it is irrefutable .. and this is not even argued by those who invented the theories: D A theory that is unfalsifiable is not a theory:) , must be conceived objectively, even if it is a noetic problem. If a person has rationally reduced the cost of election and his vote has chosen a candidate who does not maximize the benefits of the election, but vice versa, then it is not the rational behavior of the voter. atd .. atd..A co altruismus?: o)

  26. But what we can discuss is whether the current setting of conditions on the financial markets (ie whether regulation) is the right and most effective solution. I'm in favor of not. In other words, I am an opponent of central banking 🙂

  27. Rational ignorance is rational, just like rational ignorance (if we have that voter).

    Ad subordination of the lottery - it is probably a minimization of costs for him (when the cost is the choice itself, ie it is a minimization of transaction costs). If it brings benefits to the person (which he brings, otherwise he would not do it), it is completely rational.

    Ad consociational democracy - but certainly, costs and benefits are things that are completely subjective. There is certainly no dispute about the rationality of the actions of individual actors.

    Financial markets? Yes, from the point of view of individual "traders" and actors, because they behave rationally within the conditions. It is not for us to evaluate the rationality of their actions.

  28. I don't know why you economists are obsessed with rationality and rationalism in general. In political science, some experts also tried to graft it (especially those who were also economists) .. But it does not always work .. for example, the theory of coalitions, the theory of rational behavior of voters, rational action of the state in the international system, etc .. , which prevents us from considering these theories to be absolutely correct. Can we call a rational voter the one who subordinates his choice to the lottery in a way that does not know who he voted for? How rational is the formation of coalition governments in consociational democracies? And are the financial markets behaving rationally at all? Rational ignorance?

  29. Sonny:

    ad 1) yes, but what I said about reflexes certainly applies to feelings 🙂

    ad 2) No. This is one of the mistakes of David Friedman, for example. Fool is fool, but he is not irrational. Rationality has nothing to do with intelligence.

  30. (1) only technical: reflexive activity in my opinion (and Mises) does not fall into the category of action.
    (2) perhaps (!) That a meaningful definition of rationality would be such that one processes information correctly. one can have all the necessary information and still make the wrong decision, because one needs to be stupid. for example, an economic layman works with the same information as a student of economics, but there are constant opinions that he directly harms his views (for example, I read this in the discussion that we must impose a 50% duty on everything from China to stop dangerous Chinese growth) ) can't we call this "irrational"?

  31. Government, if there is no value in talking about rationality, if (simply) rationality = action, then reflexes are only part of subjective preferences, which at a certain time, at a certain place in a certain individual determine a certain action (rational). 🙂

  32. What about the fact that I'm not defending Sedlack (in a lot of things I have holes that a tractor would pass through them) - I'm more interested in the fact that either rationality is defined in some way as an unstoppable amount of irrational, or it doesn't make sense to talk about rationality at all.

    Unfortunately, most people who start talking about relative / local rationality define it in a rainbow way, and then start using it as a basis for deriving theory and as a predictive apparatus.

    By the way, in my opinion, irrationality exists, for the simple reason that we are biological apparatuses, and reflexive actions sometimes outweigh any conscious actions.

  33. Of course, we are not in dispute - I completely agree. However, Mr. Sedláček argues for irrationality (where economic laws would not apply), which is stupid. Misconduct is still rational (even in misconduct, economic laws apply).

  34. I point this out because if they are synomyms, then the predictive value of rationality is zero.

    More importantly, the predictive value of the utility is then zero. I say more importantly because much of the economy operates as a cornerstone. To do this, however, it needs some definition of utility that has a non-empty value for the antonym.

    However, if you use "virus in utility" instead of "utility" (and you can define the virus probably if you want), then we will get somewhere else. Then you can define rationality as "the actions of the individual on the basis of some input" - which allows subjective rationality, including completely random behavior, but also allows to make a slightly stronger assumption (from which more can be derived) that for exactly the same input (which is practically unattainable ), the individual would act in the same way, resp. that very similar inputs are essentially isomorphic in terms of output (a necessary prerequisite for the ability to predict - the minimum time input will always be different).

    The change from "I do something because I will benefit from it" to "part something because I believe I will benefit from it" does not look very important, but it is quite fundamental, because it says something about tying the subject. Thus, it can be deduced, for example, that if the subject's "faith" is based on bad or missing information (where "wrong" and "missing" are due to local rationality, ie if the information were "correct" or "missing", the action would was not isomorphic), will lead to bad conclusions - despite the fact that the procedure was subjectively rational.

    In the same way, I can deduce that if the subject is overwhelmed with information, he is forced to select information selectively (by no other time press), and their selection may not be (again from the point of view of his subjective rationality - see definition above), optimal with respect to "faith". in a given subjective benefit.

    And thus, instead of "irrational" behavior, we can get to "wrong" behavior - the existence of which, perhaps, people will not argue :).

    And we can get further, in the sense that information overload is basically a normal state, so subjects have to develop different (individual) heuristics - which usually work for given situations. However, a change in the situation is not necessarily detectable (especially when the subject is overwhelmed with information), so using the same heuristics (which previously worked) can lead to a runny nose.
    Etc. etc.

    By the way, game theory says that subject heuristics, if utility functions are relatively stable (it's not the same as being the same - they can be quite different, the "predictability" of the function is important), they will converge to several stable states (until the situation changes and the heuristics stop working).

  35. But if you define rationality as subjective and say "everyone is always rational at all times and every decision," you have just abolished the term rationality, because by definition no one can ever act irrationally. When irrational behavior is an empty set, the telling value of something we call rational is zero, and instead of saying "every one rational" is enough to say "every one".

    So rationality will be irrelevant (because everyone is always rational, and rational is nothing but the label "is a name"), or let's allow irrational behavior - you can have one or the other, but not both.

    It's as good as it is. If you define the utility as "utility is the reason why people do whatever", then the utility has lost its meaning, because the act that people do without utility is an empty set, and the sentence above can be written as "people do something because they are called" - which also describes the whole a set of phenomena without any other resolution.

  36. Sedlacek: Economic science explains everything as selfishness.
    Students Smetka, Panek, Kubec: No, egoism is also gifted, but economic selfishness is harmless.
    However, Sedlacek illustrates the fact that economic explanations affect only a part of reality… (I do not explain individual actions, but other complex phenomena caused by the actions of many individuals. To explain complex phenomena he uses unrealistic assumptions - max. that individuals always and constantly act rationally.)… and, for example, do not indefensibly affect "values" and "attitudes" in economic terms.
    Smetka, Panek and Kubec said: rationality is "subjective".
    This is indeed a great contradiction between the socialist and Sedlacka does not agree with economic theory - only if students consider economics as the only and all-encompassing interpretation of reality (replacing ethics, culture and tradition), or moreover identify the axioms of economics with reality.

  37. Petrph: Of course, I read the whole article, as well as Mr. Ariely's book. After all, I prove it with other quotations from the article 🙂

    All I am saying is that there is nothing special about the negotiations that Sedláček / Ariely describe, and that it has long been explained very well theoretically. The theory that behavioral economics comes up with is not correct - it focuses on certain ways of acting, but it is contrary to the general principles of action. When he tries to refute those general principles, he refutes them on the wrong assumptions (see misunderstanding of rationality).

  38. You probably didn't read Mr. Sedláček's article in its entirety - probably just the first shocking paragraph. He also describes the case of lawyers who refused to discount their services to a charity, so that a little later they would provide the same service voluntarily completely free of charge.
    Behavioral behavior is much more complex than pure economics or any ideology, and cannot be evaluated on vulgar cases. If I stayed at this level - the fact that young people come to my mother for a free hour on Christmas Eve doesn't seem very cool to me either. Offering it to pay after a meal is probably a shame, but at least in our family it is customary for the family to agree in advance who has something to buy, to cook, to bring, so that everyone can participate in it according to their abilities…

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