Monday, October 19, 2015

The Illusion Of Rational Choice And Its Political Implications

From this ABC news story, 2011
I'm teaching a course this semester on philosophy of social science, and one of the most interesting ideas we've encountered has to do with the idea of people as purposive rational actors,  working to satisfy their own preferences at the least cost possible to themselves, who engage in bargaining and negotiation with one another to get the things they want and need.

It's a pretty fundamental idea to some social science methods -- especially in economics, but also more generally, because it plays a role in helping to figure out what people are doing and why. There are many questions about modelling human behavior through this family of ideas associated with rational choice. For example, as many people have pointed out, it makes morality somewhat obscure. If you keep a commitment to another person because you've promised to do so, or if you do the right thing at a tremendous cost to your own happiness, it seems bizarre to say you've just acted to satisfy your own "preference."

But the issue that came up in our readings, though related to that, was somewhat broader. That week we were talking about the question of whether social science can take up an objective, impartial, scientific stance toward its subject, or whether humanistic interpretation is always necessary to understand human behavior.

In arguing for the latter position in a 1971 paper, Charles Taylor points out that when we understand people as rational bargaining actors -- as he thinks we do in the more scientific approach -- we always risk interpreting them incorrectly.

For one thing, he says, not all societies even have practices that would be obviously analogous to our own practices of bargaining and negotiation. But more deeply, much important human behavior isn't like this. And when we theorize it using this set of concepts, we get it wrong.

There are many kinds of examples, but Taylor gives an interesting one in the analysis of protest movements. He says that theory of rational choice entails that we analyze these movements in terms of individuals' aims, and that in this case we have two possibilities: either protests are "bargaining gambits," or they are simply madness.

But, Taylor says, sometimes a protest is neither of those things. Taylor sees around him a profound dissatisfaction with the way things are, an alienation, a sense that things are deeply not what they should be. A protest borne of this sense would not be correctly analyzed as a bargaining gambit: it may be utterly unclear what the possibilities are. And if things are not what they should be, it would not be correctly analyzed as madness.

Though Taylor wrote this in 1971, when I read it I immediately thought of the Occupy movement, and especially of the deafening chorus that met that movement, where everyone was shouting, "But what are your demands?! If you haven't got specific demands, your protest makes no sense!"

Many people said in response that it wasn't about demands, that wasn't the point. Of course the movement had many strands and ideas, but I don't think it's farfetched to say that among these was the thought that things are deeply not what they should be.

Interpretation through the lens of rational choice and bargaining makes it impossible to arrive at this conclusion about the social meaning of the protests. But that interpretation has become so ingrained in our culture, we almost can't interpret it any other way.

I don't know how and when exactly this happened, but somewhere along the way the idea that humans are basically purposive rational actors working to satisfy their own preferences at the least cost possible to themselves became so entrenched in our thinking and talking, it's hard to even frame the alternatives. It's become almost like a tautology: well, you chose that thing, so either you preferred it and acted wisely, or you preferred something else and acted stupidly.

I think one reason this idea of people as rational actors is so hard to challenge is that if you're just looking at behavior, data, all those things we've embraced in the modern world as alternatives to old-fashioned listening and literature, the theory of people as rational actors is almost impossible to really falsify. As is often pointed out, any behavior can be made to come out as rational: you just have to attribute to the person a preference for the outcome, and voilà!

But behavior that doesn't fit -- and especially behavior that seem to signify that things are deeply not what they should be -- is everywhere, not just in the modern world but as part of the human condition. When things get bad and someone can't see their way out, they freak out: they become enraged, or riddled with anxiety, or they just decide to do something, anything, to derail the situation. It's a very human response.

Whether you're talking about an unhappy marriage or the state of the modern world, this kind of "protest" behavior is common and well-known. But with our theory of human behavior, we can't even see it for what it is, because we're stuck in the bargaining gambit theory of the world.

I think Taylor is right when he says that the problem goes beyond a "mistake" and gets into the category of "illusion": the version we see looks totally normal to us, even though it is the version reflected in a fun house mirror.


Daniel said...


Sometimes when I read criticisms of "rational choice" like this guy's or yours in this post, it seems as if there must be a distinction between the notion of "preference" as used by those who believe in some sort of "rational choice" theory and "preference" as you write in the last sentence of your second paragraph. It would seem to me that a "preference" in the economic sense could be incredibly fraught by the person who makes the choice, but that it is a shortcut way of talking about making choices among alternatives. I can't imagine that an economist or other social scientist who uses the idea of "preference" means to imply that it's always clear, simple and uncomplicated. Critics seem to me to be wrongheaded when they suggest that economists or other social scientists who use "rational choice" theory are suggesting that humans ARE basically purposive rational actors, &c, and that's all that they are. Does anyone really think that? "Rational choice" is a kind of analysis for certain kinds of human action, I imagine, not a description of humanity. I could be wrong, though.

Have you come across this in your research?

Thanks, Daniel

Patricia Marino said...

Hi Daniel, thanks for the comment!

I think that to critically examine the implications of taking up a particular interpretive lens, you don't have to assume there are people who believe it is a literal representation. The idea is just to talk about the implications, or limitations, of that interpretive lens. And that's what I am doing.

But - I do think rationality assumptions have a special role, beyond that of other simplifying assumptions. This is because looking at human behavior, you have to have some basic framework for thinking about what people are trying to do. The Føllesdal paper in the linked bibliography for the course talks about how people have differed dramatically with respect to interpretations of rationality assumptions -- are they empirical? false? falsifiable? tautological? Some related discussion comes up in Caldwell, B. J. (1991). Clarifying popper. Journal of Economic Literature, 29(1), 1–33.

And I do think there are people who think using the rational choice model is either better than alternatives or maybe even the only game in town (while still, of course, taking it to be a model, and not a literal representation). What comes to mind most immediately is Richard Posner who says that his economic models transcend other approaches or render them obsolete (e g in the Introduction to his book Sex and Reason).

Finally, I do say in the post to say that I think the interesting phenomenon is really the cultural one -- not associated with any scholarly methodology, but just with the way the whole idea of people as, at bottom, economic-type agents is becoming embedded in our language and world view. Do people really think other people are like that? I have no idea, but I think they often talk as if they do. I don't know the mechanisms through which that is happening, and I'm sure they are complex, but I think it is happening.

Daniel said...

Thanks, Patricia!

I look forward to reading some of the suggested pieces.

I stumbled across this one today, too (a little old, but interesting):