I thought it was interesting how Polanyi pointed out that free markets are only one of many systems of self-organization or spontaneous order as we discussed last week. His discussion of science as a spontaneous order emanating from the individual and not a central organization, though lengthy and dry to read, was very pertinent to the theme we've been discussing as a group.
Growing board with 1945 Royal Society issues my mind wandered back to the issue of "rationality". [Sherri cringes here] In my meanderings I seem to have found a consensus that in economics the term "rationality" is related to optimization. A "rational" choice is one that optimizes in pursuit of a goal. This from wikipedia: http://en.wikipedia.org/wiki/Rationality
However, there seems to be strong dissent out there about the perfection of the economic assumption of human beings as rational. Last week Josh and I argued in favor of caution in whole-heartedly accepting the notion that human beings act rationally. My view was that you can't apply the theory across the board but that the exceptions are few enough that the general theory holds.
In a sociological journal Milan Zafirovski from the University of North Texas argues somewhat persuasively against the economic theory of rationality, making an interesting observation about utility. We economists (am I allowed to place myself in such a group?) use the concept of utility to explain away people's deviation from rationality. A person who makes a choice that makes them poorer values something other than money and so they maximize their utility for whatever they value more than money by becoming poorer (Camilla will doubtless correct me if I used "utility" wrong). However, we expand the concept of utility to include everything, so therefore it explains nothing, says Zafirovski. You can read the article here:
Note: those who don't want to wade through the entire article see section I. "Are Human Purposes Instrumental?" for the content I referred to.
Now hold on everyone, before you sacrifice me to the gods of the Free Market. I am not repudiating my strong beliefs in the free markets and the emergent order of kosmos, I just think it's valuable to explore alternate views and search for valid arguments with which you might be able to balance or improve your views with.
But what would I know about such things? According to Rich's kind, departing words from last week, people of my persuasion are terrified of things they don't believe in and can't control. We are stumbling around in a dark stupor mortified that someone might come along and present to us an alternate theory that we can't repudiate. Did someone just turn on the Discovery channel? My palms are getting clammy. Was Richard Dawkins mentioned in that newspaper article? Time to hide in my religious fundamentalist cave. And look, I realize insults flow both ways over the fence, but I've made a personal decision to approach the issue with respect and tolerance. Yet all I'm ever met with is derision and insults.
And that's probably enough deviation from economics for one week. :) Cheers everyone. Bring your nails to discussion on Thursday, for I'm sure to be crucified.