The history of economics is rich in economists of the first rank who were equally influential as philosophers, sociologists, and political thinkers: Adam Smith, John Stuart Mill, Karl Marx, and Friedrich von Hayek are just four from very different times and of very different political allegiances. Amartya Sen is another. His contributions to the purest and most abstract realms of economic theory make him “an economist’s economist”—and were one reason for his Nobel Prize in economics in 1998. But he is universally known for his work on famines, economic development, the condition of women, and the problems of poverty, work that has earned him the admiration of everyone who works in the field of development. This was another element in his Nobel citation.
Rationality and Freedom focuses on abstract issues in economic theory, but the real world obtrudes enough to remind us what motivates this work. Three or four fascinating pages discuss the surprising fact that the Indian state of Kerala “has by a large margin the longest life expectancy at birth (67.5 years for men and 73 years for women, compared with around 56 years for both men and women in India as a whole),” while more of its inhabitants complain of illness and general ill-health than anywhere else. In contrast, Bihar and Uttar Pradesh have very low life expectancy and “astonishingly low rates of self-assessed morbidity.” As health care improves and people become aware of the contrast between the possibility of good health and the actuality of minor illness, they notice what they would have ignored if there had been no progress. The implication is that objective measures of well-being—longer life expectancy—may not match subjective measures—feeling well. It is an understatement to say that this complicates the evaluation of standards of living across time and in different societies.
Rationality and Freedom consists of twenty-two chapters, most of them essays and lectures published in economics journals during the two decades before Professor Sen’s Nobel Prize. They are on two themes central both to economics and to political theory and moral philosophy. The first is the nature of individual rationality. “Rationality,” says Sen, “is interpreted here, broadly, as the discipline of subjecting one’s choices—of actions as well as of objectives, values and priorities—to reasoned scrutiny.” This is fighting talk from an economist; economics has for many years adopted very narrow conceptions of rationality, concentrating either on the capacity to choose efficient means to what are presumed to be selfish ends, or even more minimally on consistency in choice. What ends we pursue and how we have come to adopt them are widely thought not to be any of the economist’s business.
Sen insists “that it is important to reclaim for humanity the ground that has been taken from it by various arbitrarily narrow formulations of the demands of rationality.” This is not merely because, as we shall see, some transparently crazy behavior is rational by the standards of these narrow formulations; it is also because the prestige of economics among the other social sciences is such that sociologists, legal scholars, and political scientists have been applying its analytical methods to their own disciplines under the label of “rational choice theory.” The first, introductory, chapter of this book is the best discussion of what is wrong with narrow notions of rationality that a lay reader is ever likely to come across; it might with advantage be turned into a pamphlet and given to incoming graduate students in all the social sciences.
The second theme with which Sen is concerned is the question of social choice: Is there a rationally defensible way of getting from the preferences of rational individuals taken one by one to what a whole society should choose? Many readers will complain that that is not the right way to phrase the question, since not least among the issues in social choice theory is the question whether it makes any sense to think of a society choosing at all. Robert Nozick’s Anarchy, State, and Utopia (1974) argued passionately that it did not, that there are only individuals and their choices; James Buchanan, the 1986 winner of the Nobel Prize in economics, has been a fierce critic of the idea of aggregating individual preferences into a “social choice,” and a good deal of Rationality and Freedom is devoted to meeting such criticisms of the very idea of social choice.
But the economist who dominates the entire seven hundred pages of this book is Kenneth Arrow. In 1950, Arrow, a graduate student at the time, published his “impossibility theorem”—its formal title was the more optimistic-sounding “General Possibility Theorem”—which showed that (given a few apparently quite irresistible requirements) there is no rule for combining individual preferences into a social choice that does not generate paradoxes. Suppose, for example, that a society wants to decide whether the proceeds of a national lottery should be spent on education, health, the arts, or sports. We are tempted to think that there must be some way of taking each citizen’s preferences about the outcome and combining them to produce the choice of society as a whole. Arrow’s theorem demonstrated that there is not.
One might think that this result should spell the end of social choice theory. In fact, of course, it did the opposite. It inspired so many economists, including Arrow himself, to look for ways around the impossibility, and to devise alternative ways of getting from individual choice to social decision, that as Amartya Sen observes in a footnote, major economics journals finally had to discourage submissions on the subject because they were swamped. Rationality and Freedom is, then, in part an act of homage to Arrow; when reviewing the first volume of Arrow’s Collected Papers, Sen writes, “This volume is all together a marvelous collection of fine analyses, stimulating ideas, and powerful arguments from one of the greatest of economists. The quality of the reasoning varies all the way from the merely admirable to the spectacularly superb.” Which is just what one wants to say of Rationality and Freedom.
What constitutes individual rationality is a question as old as philosophy. Within the social sciences, the assumption that individuals must be treated as rational agents is less a matter of unwarranted optimism about human beings—since none of us is wholly rational all the time, and most of us are less rational than we would wish to be a good deal of the time—than a condition of being able to offer some explanation of human behavior. Commentators have expressed bewilderment about Saddam Hussein’s irrational conduct both before and during the recent war in Iraq. If he had no weapons of mass destruction, why did he provoke an invasion by not fully meeting the demands of the inspectors? That is, given his presumed goal of remaining in power, why did he not take the obvious steps to avoid an attack? If he wanted to make life difficult for an invading force once war had begun, why did he not mine the oil fields and the bridges over the Tigris? Given what we would all assume his goals to be, why did he not take efficient steps to achieve them? Only when people are rational in the limited sense of acting in the way that best promotes their purposes can we understand what they are doing and predict what they will do next.
The idea that rationality is best defined in this limited way, without getting into contentious issues about what human beings ought to want or to set themselves as their favored goals, is commonplace in social science. Indeed, as Amartya Sen says, the search for austerity in defining rationality has led a good many economists to define the rational person as one who shows consistency in his or her choices, and nothing more. But, as he also says, five minutes’ reflection on the kinds of counterexample that all theorists delight in coming up with shows that such a minimal definition may come at too high a price.
Professor Sen provides a particularly gruesome counterexample. Suppose we find a man busily cutting his toes off with a blunt knife. If he wishes to be without his toes, his actions are consistent with his goals, and his behavior displays internal consistency. The economist who sees in rational behavior nothing more than internal consistency cannot criticize his behavior, except perhaps by suggesting that a sharper knife would attain his goal more expeditiously. What the example shows is that defining rationality with no attention at all to either the justifiability of the agent’s beliefs or the justifiability of the ends being sought is not so much austere as self-defeating. Even consistency, of course, may or may not be a mark of rationality; to think I must eat bacon and eggs at every meal because I ate them at breakfast is not a high point of rational conduct. Even the much-diluted principle that a person’s “values” or “ultimate preferences” must be consistent over time may be wrong. Should we not learn from experience and revise our values and preferences in the light of that experience?
A subject on which Amartya Sen is particularly illuminating is the sense in which rationality involves “maximization,” or getting as much as possible. The most famous figure in the history of arguments about rational choice, and specifically about maximization, is not a person but a donkey. Centuries before Sen’s famous essay “Rational Fools,” the fourteenth-century logician Jean Buridan—a philosopher at the University of Paris—popularized the dilemma faced by a “rational ass.” Buridan’s ass faced two equally attractive bundles of hay; they were not only equally attractive but equidistant from him. Unable to decide between them, he starved to death. It was only because he was a rational ass that he starved; a conservative ass that habitually ate whatever was on the left (or right) of his line of view would have been fine; an impulsive ass that ate the first pile of hay his eye lighted on would have been fine. The trouble was that neither pile was (rationally) preferable to the other, so Buridan’s ass could not choose between them. Buridan’s ass stars in several essays here.
Many moral philosophers have recently argued that rationality has nothing to do with maximizing anything whatever. The right number of chocolate bars to eat may be debatable, but it surely is not “as many as possible”; and there are many activities in life in which “good enough” is what we want—who wants to spend all his waking hours ensuring that he has the very best television set or the very best car? In everyday life, getting the best result is mostly very different from maximizing. Sen recurs several times to the reason why this view (from which he does not in fact dissent) does not impugn his view that maximization is essential to rationality—and that an understanding of this point would have saved Buridan’s ass. There is a point here that is partly verbal—economists and moral philosophers seem to employ “maximization” and “optimization” in opposite senses—and partly not.