May 17, 2013 | 4
The word rational is widely misused. Scientists often apply it unnaturally, in ways that conflict with our biology. Nobel laureates Daniel Kahneman and Gary Becker, and their respective schools of thought, are on opposite sides of this breach with our nature. They revive an old struggle between prudent empiricism and blinkering “theorism” (an overreliance on idealized models).
“In common language a rational person is certainly reasonable,” and “generally in tune with reality,” writes Kahneman. But economists generally use rational to mean “logical coherence—reasonable or not.” For example, Becker in “A Rational Theory of Addiction,” says rational means having “a consistent plan to maximize utility over time.” Utility is a theoretical equivalent for profit or pleasure (see Bentham’s bucket error). Becker and his so called rational-agent school, by focusing exclusively on utility, tune out key realities. For them drug addiction is just another method of maximizing utility.
Kahneman says Becker’s “faith in human rationality” is ill founded because abundant evidence shows that certain kinds of inconsistency are “built into the design of our minds.” Measuring these “cognitive biases” established the new field of “behavioral economics”—its name amusingly emphasizing what’s been lacking—dedicated to describing the everywhere evident ways in which we often aren’t rational.
To minimize misuse, consider that the word rational really incorporates three types of assumptions: first, about desirable goals; second, about effective methods of attaining them; and third, about whether agents have the needed skills.
Un-behavioral economists, like Becker, often make “mis-rational” errors. Concerned only with logically coherent methods, they remain neutral about goals, even when these are biologically incoherent or have plainly undesirable consequences. Their theory sees humans as only ever having one rational goal: self-interested utility maximization—so heroin is like bowling, just another source of utility. Though this has method, yet there is madness in it.
Kahneman ‘s side also errs, though much less badly, about rational methods and skills. Their work often involves financial decisions under conditions of uncertainty described by numerical probabilities. But as Gary Marcus notes, “Humans didn’t evolve to think about numbers, much less money.” And as Steven Pinker puts it, “The logic of the market remains cognitively unnatural.” Methods to calculate maximum benefit based on probabilities exist, but the skills needed are “cognitively unnatural.” Without training so that these become like second nature skills, we can’t routinely make probabilistically rational choices.
Writing in 1651, Thomas Hobbes understood how important this was: “Reason is not, as sense and memory, born with us; nor gotten by experience only, as prudence is; but attained by industry [i.e. diligent learning and practice].” Humans can be rational, with training.
Illustration by Julia Suits, The New Yorker Cartoonist & author of The Extraordinary Catalog of Peculiar Inventions.
Previously in this series: