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What Rational Really Means

The views expressed are those of the author and are not necessarily those of Scientific American.


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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:

Kahneman and Bentham’s Bucket of Happiness
Kahneman’s Clarity: Using Mysterious Coinage in Science

Jag Bhalla About the Author: Jag Bhalla is an entrepreneur and writer. His current project is Errors We Live By, a series of short exoteric essays exposing errors in the big ideas running our lives, details at www.errorsweliveby.comwww.errorsweliveby.com. His last book was I'm Not Hanging Noodles On Your Ears, a surreptitious science gift book from National Geographic Books, details at www.hangingnoodles.comwww.hangingnoodles.com. It explains his twitter handle @hangingnoodles Follow on Twitter @hangingnoodles.

The views expressed are those of the author and are not necessarily those of Scientific American.






Comments 4 Comments

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  1. 1. JoeJeffrey 5:41 pm 05/19/2013

    Kahneman is mis-representing the facts. Economists do not use the concept of logical coherence; they use the concepts of self-interest and probability — and they very badly misuse probability, applying probability language in a myriad of situation in which there are no trials, or only one – and so the concept of probability violated. Kahneman adds cognitive psychology to that mix, which helps a little in some cases, but cognitive psychology is not far too narrow a set of concepts to encompass the observed facts about people. Becker is on the right track: recognizing that humans act several kinds of value: hedonic, prudential, ethical, and esthetic (in the sense of fittingness or appropriateness). That’s not theoretical; it’s observed fact. Person act to bring about what they value (a tautology), limited by what they are able to do (also a a tautology), and they *always* act that way. Human action is never irrational, but is is often mistaken or based on incorrect perceptions. But that’s error, not irrationality.

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  2. 2. elbittar 7:48 pm 05/20/2013

    Utility as a measurement of pleasure is something that most economist do not consider anymore. It just a representation of preferences.

    Another interpretation about utility function can be seen in http://kuznets.fas.harvard.edu/~aroth/rational.html by Al Roth.

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  3. 3. bucketofsquid 12:08 pm 06/4/2013

    Having just looked up the definition of rational I have to say that unless it is used as a mathematics term, the meaning is very subjective.

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  4. 4. PDLARK 2:38 am 06/12/2013

    The problem with Becker’s take on rationality, a world of omniscient optimizers in expected values, is that it does not yield theories that can be tested for anything other than logical consistency. It is an approach that provides rationalizations, often mathematical, for historical circumstances; it does not provide a priori predictions.

    The Tversky/Kahneman approach, behavioral decision theory, depended from the outset in the late 1960s on the conventional definition of rationality in microeconomics. The work cleverly and usefully showed behavioral departures from that conception of rationality. The closest thing in the line of work to an alternative conception of rationality is “prospect theory.”

    Bhalla needs to read some Herbert A. Simon for depth on this topic. Becker and Kahnemann are neither the founders nor the leaders of distinctive “schools of thought.”

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