On Saturday, March 7, Harvard Law School’s Program on Law and Mind Sciences held its third annual conference, “The Free Market Mindset: History, Psychology and Consequences.”

Close to 200 people attended the day-long event at HLS, bringing together leading scholars in law, economics, social psychology, and social cognition to discuss their research on the historical origins, psychological antecedents, and policy consequences of the free market mindset.

According to HLS Professor Jon Hanson, Director of the Project on Law and Mind Sciences at HLS, the conference’s topic was originally intended to be moral psychology, but after the market collapse in October, conference organizers decided that the free market mindset was too important a topic to ignore.

“We did not anticipate the extent to which this topic would be as salient today as it is,” said Hanson.

Hanson said he hoped the conference would be an opportunity to examine the free market mindset in light of where we are, to explore why free markets have been so alluring to economists, scholars, and policy-makers even amidst the current financial turmoil.

In a lunchtime keynote address, Judge Richard Posner ’62, [photo right] U.S. Court of Appeals for the Seventh Circuit and a senior lecturer at the University of Chicago, offered remarks focusing on the “current Depression,” based on his forthcoming book “A Failure of Capitalism: The Crisis of ’08 and the Descent into Depression,” due out by Harvard University Press in May. Posner opened his talk by discussing judicial decision-making, based on his recent book “How Judges Think,” and how, among other things, ideology influences decision making.

The conference opened with discussions on the history of the free market idea. HLS Professor Christine Desan, a specialist in legal history, civil procedure, and legal and political thought, spoke about “Legal Categories of Thought,” how the law categorizes different kinds of liquidity — including dollars, bonds and securities. She reviewed some of the ways that legal doctrine has disciplined our thought, including assumptions about money, and about free choice in the marketplace.

University of Chicago Law Professor Bernard Harcourt ’89  presented his research and recent article on “Neoliberal Penality: The Birth of Natural Order, the Illusion of Free Markets,” In his talk, he traced a genealogy of neoliberal penality and explored the effects it has had in the field of crime and punishment, as well as in the broader economy and society. Both Desan and Harcourt participated in a Q&A session with the audience after their talk.

In another session, Harvard University Economics professor Stephen Marglin, presented a talk on the free market and economics titled “How Thinking Like an Economist Undermines Community,” based on his 2008 book “The Dismal Science.” He described some of the foundational assumptions of economics have promoted social isolation over deep social bonds.

Juliet Schor, a professor of sociology at Boston College, presented “Colossal Failure: The Output Bias of Market Economies.” Schor discussed the implications of what has become a profound market failure and the biases that operate in the goods and labor markets.

In later sessions on psychology, Sheena Iyengar, a professor in the management division of the Columbia Business School, discussed her research on “The Multiple Choice Problem,” looking at how the exercise of choosing and the availability of numerous options affect decision quality and happiness with decision outcomes.

In “Choice, Social Class, and Agency,” Nicole Stephens, a Ph.D. student in social psychology at Stanford University, presented her research and a series of lab and field studies questioning the assumption that choice is a fundamental or “basic” unit of human behavior, and that behavior is a product of individual choice.

Jaime Napier, a Ph.D. student in social psychology at New York University working with NYU Professors of Psychology Tom Tyler and John Jost, presented their research on “The Palliative Function of Ideology,” drawing on “system-justification theory and the notion that conservative ideology serves a palliative function to explain why conservatives are happier than liberals.”

Barry Schwartz, a professor of social theory and social action at Swarthmore College and the author of the “Paradox of Choice,” gave a talk titled “Addicted to Incentives: How the Ideology of Self Interest Can Be Self-Fulfilling,” arguing that the reductive appeal to self-interest as the master human motive is a false description of human nature.

In the final discussion of the day, Douglas Kysar ’98, professor of law at Yale Law School, and Hanson tackled the topics of law and policy. Kysar focused on environmental policy and argued against the use of strict cost-benefit analysis when creating environmental laws. Environmental law requires a more “humanistic approach,” he argued.

In his own talk, entitled “Regulation Reactance,” Hanson [photo left] tested his theory that there are certain policy stereotypes ingrained in American culture. Through the use of advertising clips and snips of political speeches, he showed that Americans tend to try to establish a freedom to choose when they perceive that their liberty has been inhibited. In politics, this tends to mean that people think markets lead to freedom, and government regulation is coercive. Hanson and his collaborators (including 3L student Mark Yeboah) are currently studying these implicit policy associations, and how they might affect policy recommendations.

Within the next several months, edited versions of videos from the conference will be made available on The Project on Law and Mind Sciences website (where you can already find videos of presentations from the previous two conferences).   In addition, Hanson is working with a group of 3L students on a book, “Ideology, Psychology, and Law,” which will include chapters discussing some of the themes from this year’s conference.