Decoded, 2nd Edition

Foreword

If it seems strange to open the foreword to a book about marketing by making reference to a sixteenth-century Danish astronomer, please do bear with me for a moment.

Tycho Brahe (1546–1601) is now credited by many historians of science as being the man who made the work of Kepler and Newton possible.

The formulation of the laws of physics that have proved so useful in the physical sciences was possible only because of Brahe's work in cataloguing the movements of celestial bodies. Without the hoard of empirical data amassed by Brahe, the theories propounded by his student Kepler or by Newton may never have come about. Or – equally likely – other theories may have appeared and persisted, which were plausible and expedient, but simply wrong.

Quite a few people, among them the economist Paul Ormerod, have used this point to make a fairly damning attack on conventional economic theory. And with good reason. The theory of human action advanced by neo-classical economics is not founded on any empirical observation of how people make decisions, or on any research into neuroscience: instead, unlike the advances in astronomy and physics, where observation led to theory, the process was made to work the other way round: a plausible theory was developed of how human beings should make economic decisions, and a whole body of work was then constructed by extrapolation from these initial assumptions.

However, these assumptions, though convenient, may turn out to be almost entirely ...