Economic Rationality

***If you label everything "rational," you can indeed use "rationality"as the explanation --- but what is the point? ***

---------Albert O. Hirschman ------- (cited in Swedberd, Richard. Economics and Sociology. Princeton, NJ: Princeton University Press, 1990, p. 330)

(Last update: 04/01/03. You are at the University of Nebraska - Lincoln, USA).

A Common Perspective in Microeconomic Applications

Hirschman and Swedberg are referring to the notion represented in the background of  most microeconomic applications that virtually everything can be explained by the pursuit of self-interest, i.e., rational economic action(s). This perspective is sometimes derisively referred to as "economic imperialism," that is, using microeconomics to address all manner of actions taken by humans/ all human behavior.

Metaeconomics Proposes

to go beyond labeling every action being taken in the self-interest and going beyond rationality characterized in this narrow sense. Rather, it embraces the moral dimension of human experience and posits that a we- or other-interest is also rationally pursued, and also oft influenced by the economic calculus.

• It is rational to do what is right, what one ought to do, in complex integration with what one wants to do.
• The individual jointly pursues the self-interest and the other-interest (latter reflecting the moral dimension), at the same time, simultaneously, jointly. . . one perhaps cannot pursue the one without the other (like a sheep cannot produce wool without mutton!).
• A "distinct entity" (Khalil, 1990) will emerge to represent/be the individual, a third part other than the two interests, who has looked deeply not only into the self but also into the conscience, while trying to sympathize, empathize... perhaps even act with compassion and altruism... with the state of others. Adam Smith spoke of the Impartial Spectator  (at least potentially) within each individual. The self and the impartial spectator interact: The distinct entity emerges, "...beyond self-interest and altruism (Khalil, 1990)," i.e., beyond both self-interest and other-interest.
• The distinct entity is modeled in metaeconomics as someone with joint utility  and gaining utility from rationally pursuing pleasure/avoiding pain AND gaining utility from following the conscience albeit each a substantively different kind of utility, perhaps irreducible (See Etzioni, 1986).
• An individual who achieves an integrated balance might be best described in an I-Thou state consistent with this notion from Buber (1922, as translated by Smith, 1958).

References:

Etzioni, A. "The Case for a Multiple-Utility Conception." Econ. and Philos. 2 (1986): 159-183. (See Reviews).

Khalil, E.L. "Beyond Self-Interest and Altruism." Econ. and Philos. 6(1990): 255-273.

Smith, R.G.  I and Thou (translation of Martin Buber's Ich and Du, circa 1922).  New York:  Charles Scribner's Sons, 1958.

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