As conceived in this book, economics is the science of rational choice in a world─our world─in which resources are limited in relation to human wants. The task of economics, so defined, is to explore the implications of assuming that man is a rational maximizer of his ends in life, his satisfactions─what we shall call his "self-interest.” Rational maximization should not be confused with conscious calculation. Economics is not a thoery about consciousness. Behavior is rational when it conforms to the model of rational choice, whatever the state of mind of the chooser.(...) Nor is perfect rationality assumed; rational-choice thoery allows us to assume that rationality is "bounded” because of human cognitive limitations, although another way to think of those limitations is as costs of absorbing and using information.
Richard PosnerRelated topics
book call choice cognitive economics explore human limited man maximization mind model nor perfect science self-interest should state task using way whatever ends costsRelated quotes
Keynes didn't make an all-out assault on Economic Man, but he often resorted to plausible psychological theorizing rather than careful analysis of what a rational decision-maker would do. Business decisions were driven by "animal spirits,” consumer decisions by a psychological tendency to spend some but not all of any increase in income, wage settlements by a sense of fairness, and so on.
But was it really a good idea to diminish the role of Economic Man that much? No, said Friedman, who argued in his 1953 essay "The Methodology of Positive Economics” that economic theories should be judged not by their psychological realism but by their ability to predict behavior. And Friedman's two greatest triumphs as an economic theorist came from applying the hypothesis of rational behavior to questions other economists had thought beyond its reach.
Paul Krugman
It should be clear by now that there are people who can, in fact, be reasonably considered experts; that it is rational to rely, within limits, on ex pert opinion; and that it is possible, by exercising relatively simple criteria, to gain insight into whether a particular expert is reliable or not. It is also true that experts, of course, do make mistakes, and that even the agreement of a large majority of experts in a field does not guarantee that they got it right. That's the nature of scientific truth, as we have seen throughout this book: it is tentative, because it is the result of a human endeavor that is limited both by the type and amount of available evidence and by humans' finite mental powers and emotional reactions. But the examples above show how you can, with a little bit of practice, tell science from bunk!
Massimo Pigliucci
Economics is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world. It is compelled to be this, because, unlike the typical natural science, the material to which it is applied is, in too many respects, not homogeneous through time. The object of a model is to segregate the semi-permanent or relatively constant factors from those which are transitory or fluctuating so as to develop a logical way of thinking about the latter, and of understanding the time sequences to which they give rise in particular cases.
Good economists are scarce because the gift for using "vigilant observation" to choose good models, although it does not require a highly specialised intellectual technique, appears to be a very rare one.
John Maynard Keynes
I, too, have made a wee-little book from the same materials, which I call the Philosophy of Jesus; it is a paradigma of his doctrines, made by cutting the texts out of the book, and arranging them on the pages of a blank book, in a certain order of time or subject. A more beautiful or precious morsel of ethics I have never seen; it is a document in proof that I am a real Christian, that is to say, a disciple of the doctrines of Jesus, very different from the Platonists, who call me infidel and themselves Christians and preachers of the gospel, while they draw all their characteristic dogmas from what its author never said nor saw. They have compounded from the heathen mysteries a system beyond the comprehension of man, of which the great reformer of the vicious ethics and deism of the Jews, were he to return on earth, would not recognize one feature.
Thomas Jefferson
...yet we are told that this great nation, with such a record of splendid achievements in the past and in the present, is unfit to make its own laws, is unfit to control its own finance, and that it is to be placed as if it were a nation of children or lunatics, under the tutelage and guardianship of some other body-and what body? Who are the guardians of this mighty people? Who are they? With all respect, I shall have to make exceptions; but I am speaking of them as a whole. ... They are men who have neither the training, the qualifications, nor the experience which would fit them for such a gigantic task. They are men whose sole qualification-speaking in the main, and for the majority of them-they are simply men whose sole qualification is that they are the first born of persons who had just as little qualification as themselves.
David Lloyd George