--- Ted Winslow <egwinslow at rogers.com> wrote:
> What alternative explanation does your idea of
> "rationality" provide
> for the adoption by economists of the view that
> human thought,
> willing and acting have everywhere and always been
> "rational" in
> their sense. In particular, does it imply that
[WS:] Greater predictive value, I suppose. If you know the frame that defines which variables are relevant and what their weights are in a particular situation, you have a better chance of predicting what conclusion an individual will reach. It is, of course, important to underscore that frames are institutionalized or "socially constructed" as sociologists would say, so you can predcit them by knowing the institutional setting in which the reasoning occurs.
Let me illustrate that with an example. Suppose that you want to make a decision about mass producing certain widgets. There is a fairly great number of variables that can enter this consideration: the cost of labor, the cost of material, the cost of energy, the cost of fixed structures, envirnmental cost (pollution etc.) opportunity cost (i,e, not producing a different good instead, neighborhood effect (aka positive externalities,) social cost (i.e. recuction of labor force, retraining labor, cost of unemployment, taxes, expected profitablity, expected social benefits (i.e use value in marxist terminology), implications for national defense or international policy, impact on national economy, and so on.
It is obvious that not all those variables receive equal weight in making a decision about widget production, or even enter the equation at all. Rather, which variables feature prominently and which ones are downplayed or ignored altogether depends on the instituional ramification of who is making the decision.
If the decision maker is within the business/Wall street type of instititutional setting, it would be a safe bet to predict that the variables featuring prominently in the calculations will be profits (a benefit) and labor cost (a cost), and most of the environmental and social variables will be either paid lip service or ignored altogether. If the instituional setting is a labor union, however, labor compensation will prominenty feature as a benefit, profits will probably be downplayed, social cost (unemployment etc.) will also receive significant attention, while environmental impact will probably ignored. Still different model will be used by the goverment, environmental groups, etc. It thus follows, that knowing a priori the institutional setting in which a particular rational discourse will occure can greatly improve the chances of predicting what conclusions will be reached and what decisions will be made.
The most important aspect of this argument is that reasoning of any kind, especially economic decision making, is NOT an individual act, as most philosophers mistakenly assume, but a SOCIAL act. That is to say, the problem is framed by social-institutional settings, and individual rationality i.e. processing of information and reaching conclusions occurs only within the ramifications of that setting and is heavily influenced if not determined by it. Of course, individuals may try to go beyond that setting, but the cost of so doing is enormous, so few even try and even fewer succeed.
I outlined this argument (inspired by the _Eighteenth Brumaire of Louis Bonaparte_ by Marx) in S. W. Sokolowski _Civil Society and the Professions in Eastern Europe_, Kluwer/Plenum, 2001 (chapter 6), so anyone suffering from insomnia may consider reading it instead of counting sheep. As I said before, I will try to edit this chapter and post it on my blog, when I develop one.
Wojtek
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