The formalizing of self-interest as an economic principle was largely the work of Francis Edgeworth. It is sometimes wrongly traced back to the. It is worth considering how this approach compares with Amartya Sen’s arguments about “commitments” in “Rational Fools” (link). Sen’s essay. PDF | This article presents a critique of Amartya Sen’s article “Rational Fools”.
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Other economists might object to this formulation on the basis of the fact that second-order preference rankings are more difficult to model; so we don’t get clean, simple mathematical rationa, of behavior if we introduce this complication.
The motive to do the right thing is different than the motive to enjoy oneself, and lumping them together is a categorical mistake. Thus, an actor can be aware of the “right” thing to do and yet be inclined esn do another.
The Creation of Rational Fools :: Writing Associates Program :: Swarthmore College
The A,artya of Shared Values. The first, more intuitive conception of justice is based on impartiality. But even if additional motivations are present, claiming that commitment is never even a partial motivation is to say that a non-consequentialist belief is never rationwl reason in itself for action. Sen’s concept of sympathy includes situations where the act of helping another person gives the actor a positive feeling and cases where someone else’s bad situation leads to unpleasant feelings in an observer.
If, on the other hand, we accept that commitment may play a role in decision-making and want to reform utility theory, we need an alternative idea of folls orderings how individuals rank alternatives foools desirability that can accommodate it. Rational Choice Theory and Economic Laws: The characteristic of commitment with which I am most concerned here is the fact that it drives a wedge between personal choice and personal welfare, and much of traditional economic theory relies on the identity of the two.
This may be true, but non-economists have already found a way to avoid this costly mistake.
Fundamental to nearly all of economics is the economic theory ratipnal utility. Sen suggests that there is a ranking of preference orderings. Preference ordering A is what standard economic theory takes to be the only one.
Human Richness and Capabilities Enhancement. The homo economicus assumption teaches those who use it how to efficiently act as to satisfy preference ordering A or B.
The Creation of Rational Fools
Though never intended to be an accurate conception of human nature, its relative plausibility in most domains of economics has made it a very useful model of behavior. To help us better understand both commitment and ethical preferences, it may be worthwhile to consider how they relate to conceptions of justice.
And Sen’s point is an important one: Having rejected rwtional he concludes that individuals act not to maximize overall utility, but instead to maximize only their own utility. First, this reduces preferences to observed behavior, as mistake already critiqued above. Mill Some Things Considered. Homo economicus is not equipped to understand his disabilities, and those that emulate him are destined to become rational fools.
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But defenders of standard economic theory and homo economicus may simply say ssn this is a practical error, not a shortcoming of the fundamental principle of utility-maximization.
But Sen rightly points out that this construction doesn’t give us a basis for choosing when the two orderings dictate incompatible choices.
Another experiment that compared the behavior of economists to that of non-economists was conducted by Robert Frank, Thomas Gilovich and Dennis Regan. Standard economic theory assumes that A, the tational welfare option, is anartya one and only preference ordering and that if the individual is rational, it corresponds perfectly to C, the actual choices made.
I have tried to show why this change is necessary and why the consequences may well be serious. All of these considerations have a lot of impact on how we think about setting up a society to that is both just and encourages human rationap. Find it on Scholar. Social and Political Philosophy. After extensive explanation and instruction, participants were to choose whether to cooperate or defect in a one-shot prisoner’s dilemma.
Rational Fools: Amartya Sen’s Critique of Economic Theory | Rgumentative
However, its continued use as an assumption with little reference to its implausibility outside certain domains has lent it more credibility than Mill or Edgeworth ever intended it to wield.
Moving on from Edgeworth, the argument for self-interest and rationality has sometimes been given in the form of revealed preference. In this view, justice is defined by the agreements that people form while acting in their own interest.