One interesting footnote: although Friedman made great strides in macroeconomics by applying the concept of individual rationality, he also knew where to stop. In the 1970s, some economists pushed Friedman's analysis of inflation even further, arguing that there is no usable trade-off between inflation and unemployment even in the short run, because people will anticipate government actions and build that anticipation, as well as past experience, into their price-setting and wage-bargaining. This doctrine, known as "rational expectations,” swept through much of academic economics. But Friedman never went there.
Paul KrugmanRelated topics
academic anticipation applying build concept doctrine economics experience footnote went government great inflation known past run short stop sweep well 1970s macroeconomics Friedman trade-offRelated quotes
Intelligence, then, is the ability to attain goals in the face of obstacles by means of decisions based on rational (truth-obeying) rules. The computer scientists Allen Newell and Herbert Simon fleshed this idea out further by noting that intelligence consists of specifying a goal, assessing the current situation to see how it differs from the goal, and applying a set of operations that reduce the difference. Perhaps reassuringly, by this definition human beings, not just aliens, are intelligent. We have desires, and we pursue them using beliefs, which, when all goes well, are at least approximately or probabilistically true.
Steven Pinker
The student of culture is concerned with a characteristic which man displays more markedly than any other known creature - the ability to transmit what he has learned. In following the procedure I suggest, the learning of Homo sapiens would be treated as a further specialization of the concept of grades, with the recognition that in some species - possibly even in some orders - the ability to learn may represent not only an improvement, in an evolutionary sense, but also an increase in vulnerability. Man's unique, high ability to learn, coupled as it is with a small amount of built-in behavior, represents such a vulnerability.
Margaret Mead
Not only is it possible to devise complete models of the economy on hypotheses other than rationality, but in fact virtually every practical theory of macroeconomics is partly so based. The price- and wage- rigidity elements of Keynesian theory are hard to fit into a rational framework, though some valiant efforts have been made. ... But if the Keynesian model is a natural target of criticism by the upholders of universal rationality, it must be added that monetarism is no better. I know of no serious derivation of the demand for money from a rational optimization. ... The use of rationality in these arguments is ritualistic, not essential.
Kenneth Arrow
These issues are very complex and are best left to a full treatment of the principle of rectification. In the absence of such a treatment applied to a particular society, one cannot use the analysis and theory presented here to condemn any particular scheme of transfer payments, unless it is clear that no considerations of rectification of injustice could apply to justify it. Although to introduce socialism as the punishment for our sins would be to go too far, past injustices might seem to be so great as to make necessary in the short run a more extensive state in order to rectify them.
Robert Nozick
Whereas reasons may, and usually do, figure among the proximate causes of belief, and thus play a part in both kinds of series (cognitive and causal), it is always possible to trace back the causal series to a point where every trace of rationality vanishes ; where we are left face to face with conditions of beliefs social, physiological, and physical- which, considered in themselves, are quite a-logical in their character. /.../ on any merely naturalistic hypothesis, the rational elements in the causal series lie always on the surface. Penetrate but a short way down, and they are found no more.
Arthur Balfour