Last week I posted about “breast ironing,” the practice by which young women’s developing breasts are “massaged, pounded, pressed, or patted with an object, usually heated in a wooden fire, to make them stop developing, grow more slowly or disappear completely” in Cameroon. See my original post on the topic for the logic behind the practice, which I do not care to validate further by discussing it again.
In that post, I also discussed female genital mutilation (FGM), explaining how asking someone about their view of FGM was a litmus test of sorts for the limits of that person’s cultural relativism.
Carol Gallo wrote an excellent comment on my post, in which she explained that it is difficult for well-meaning outsiders to understand cultural phenomena like FGM. I responded by explaining how, though I disagree with FGM, I see the practice as rational. After all, if the norm is to have one’s daughter FGMed, not following the norm might lead to a fate worse than following the norm.
This is because of what we call a “multilateral punishment strategy” in economics — the phenomenon whereby norms are enforced by punishing those who do not follow norms, and by punishing would-be punishers whenever they fail to punish the transgressors. See Greif’s (1993) classic article on the Maghribi traders for a theoretical treatment, or read Kaushik Basu’s Prelude to Political Economy for a more intuitive discussion.
Carol responded, further beginning as follows:
Funnily enough, I only half-accept the idea of individual rationality because I see people do things that are terrible for them or make no sense all the time (…).
This brings me to the topic of today’s post.
The Rationality Straw Man
It is de bon ton in the media and elsewhere to condemn economists for their belief in individual rationality. “Bah! Humbug!,” goes the critique, “we know people aren’t rational because they do dumb things, like, all the time…”
But merely declaring that people aren’t rational does not make it so. In economics, individual rationality rests on two assumptions:
- Completeness: People can compare two alternatives x and y, and determine whether they prefer x to y, y to x, or whether they are indifferent between y and x, and
- Transitivity: If someone prefers x to y and y to z, then that person prefers x to z.
That’s it; that’s all. When an economist assumes individual rationality, all she is saying is that people’s preferences are complete and transitive. One can build a very rich theory of individual behavior on the basis of these two seemingly simple assumptions.
Moreover, there need not be an inconsistency between the assumption of individual rationality and doing dumb things. Car surfing is certainly among the dumbest things I can think of, but it’s not irrational — the teenager standing on the roof of his friend’s car might feel the need to prove something to himself or to his girlfriend, which outweighs the perceived risk of injury or death. The person who smokes two packs a day might strongly discount the future.
In other words, “We know people aren’t rational because they do dumb things” does not constitute a valid critique of individual rationality — it is more of a straw man than anything else. I would start here for a critique of individual rationality that has real traction.
Update: Paul Kelleher notes in the comments that what I am talking about is not necessarily a straw man, and that perhaps the right concept to apply here is that of fallacy of equivocation.
Perhaps it’s more genial to admit that the economist’s notion of rationality is technical and not really in line with the everyday notion. In that case the fallacy would be one of equivocation, not a straw man.
Thanks for your comment, Paul. I tend to agree. I think that it is not necessarily the nonspecialist’s job to understand the technicalities of a given discipline. Rather, it is the disciplinarian’s job to make sure he explains clearly enough. That was a hard-won lesson throughout my tenure track — when a referee does not understand what you’re doing, you should blame your poor explanations 95% of the time — and I was trying to make this post a “teachable moment.”
Check out this paper by Mackie on how such social conventions as FGM and foot-binding can disappear faster than we’d expect: http://www.jstor.org/stable/10.2307/2096305
Thanks for the reference, Ken. I’ve read (and thoroughly enjoyed) that paper, which we cite in the current version of our paper on FGM. It was the first paper I read on the topic, but it remains on of the best even after reading (almost) everything I could find on FGM.
I think that while the popular definition of rationality and economists’ technical definition of it are different (as noted) it’s *also* true that economists often use the idea of rationality in a broader rhetorical way outside of scholarly discussions with other economists. Not saying you do this (ie, your argument above isn’t an example of this) and it might take me a bit to dig up some examples… but I think some of the damage of conflation is done by economists who fail to acknowledge the heroic assumptions behind some policy assertions. Ie, saying “rational individuals will do X” without noting that this depends on perfect information, perfect competition, etc. Folks who see these flaws in the hypothesized outcome but don’t know the economic jargon well enough to realize that the real root of their complaint (which is the belief that the actual situation facing individuals is more complex than what is captured by some models) instead respond by saying “hey, if that’s what a rational person would do in this situation, then I don’t think people rational.”
Lots of generalizing, I know, but all that to say that I think economists aren’t always good at sticking to this narrowly technical definition of rationality. If that’s what they mean when they write for the general public, maybe they should switch to saying ‘actors with complete and transitive preferences’. I think rationality is thrown around not just because it’s useful shorthand for difficult technical jargon, but because it serves other purposes too.
The assumption of rationality has some other weaknesses you do not seem to point out which would explain the very “irrational behaviour”. In most cases such as the examples you gave about FGM, an individual may not be the (only) decision maker and hence his rationality may not count!
Thanks for your comment, Brendan. Could you point us to some of those weaknesses?
Good post. I think a lot of the confusion between academics who talk about rationality and everyone else is that most people think of rationality as making statements about preferences. Rational people want to succeed in life, be happy, make more money, etc. Academics (should) use it to make statements about the *structure* of preferences, and that is a really weird thing to do. It is useful, but not at all intuitive.
Part of the problem also, I think, is that academics often move very quickly from the idea of rational actors to imputing some simple preferences to those actors (Brett seemed to touch on this above). The two are logically distinct, but we often bundle them together and I think that rightly confuses a lot of people.
Ryan writes: “Academics (should) use [“rationality”] to make statements about the *structure* of preferences.”
Ryan, do you mean that *all* academics have reason to use this and only this notion of rationality? Or just that social scientists do?
social scientists. I’m not an economist and so I was trying to find a category bigger than “economists.” I obviously picked one that was too big.
Gotchya.
[…] has an interesting comment on the critique of rationality in economics, and Marc Bellemare has noticed as well. If rationality is problematic for economics, then it is doubly so for the rest of the […]
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