Economic Rationality

Criticisms of Economic Rationality

The conception of economic rationality as the maximization of interests or utility has been subjected to a number of criticisms, several of which are ethical in nature. For instance, some critics contend that in failing to provide any criterion for the selection of basic goals or ends, the theory fails to discriminate between legitimate and illegitimate pursuits on the part of individuals. While it is true that accounts of economic rationality have little to say about the choice of ends or goals themselves, this criticism, if sound, would not necessarily show that the theory was false but merely that it was incomplete. Thus, many proponents of the economic account of rationality as maximization, particularly when taken in the narrower sense above, see the theory not as a complete account of rationality but solely as a means of understanding the rationality of certain economic choices and decisions that can be supplemented with an independent account of the rational choice of ends.

A more forceful criticism of economic rationality is that this account is intrinsically incompatible with the demands of morality if taken as a normative account of rationality. According to this criticism, in requiring agents to maximize individual interests or utility, the economic account of rationality will necessarily lead persons to violate the interests and/or rights of others. That is, in this view, economic rationality will often recommend immoral behavior when interests come into conflict. Furthermore, even when the theory is merely used as a methodological tool for the analysis of economic behavior, critics see a tendency on the part of economists to begin to view the theory as if it was normative in nature and to use it as a de facto standard of normative evaluation.

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