More on irrationality

February 12th, 2009  |  Published in Economics idea  |  2 Comments

If you want to make rational decisions, you need to have a goal. Without a goal, your  decisions don’t matter. There is no way to tell if actions you take help you or hurt you. If one thing is just as good as another, it doesn’t matter which one you pick.

If you have a simple goal, you can be rational without much effort. For example, if your goal  is to get the dirty laundry off the floor and into the laundry hamper, it’s easy to evaluate your options. Most likely, you will simply pick up the clothes and place them in the hamper. Other options to consider would be bribing someone else to pick them up for you or building a robot to pick them up automatically. Whatever method you pick, it is easy to determine if the task has been successfully completed.

Harder goals  like landing a man on the moon can be approached rationally as well. Making decisions to achieve difficult goals  takes considerable thought and training. It is, however, still easy to separate good ideas from clearly crazy ones. Building a rocket to go the moon makes sense. Leaping from the top of a tall tree is less likely to get you there.

If goals are poorly defined, being rational is more difficult. You probably want to be happy. Unfortunately, you probably don’t have a firm grip on what exactly happiness is. You probably figure you will know it when you find it. Rationally pursuing happiness is difficult because the goal is vague.

Being rational is also difficult if you have multiple goals. If you need to get the laundry into its hamper AND need more sleep, you have to prioritize. Somehow you need to be able to decide the relative importance of different goals. To do this, you need to have a larger overall goal to which the other goals contribute. It is then possible to evaluate rationally the importance of the different sub-goals and decide what to do.

Unfortunately, most people don’t have an overarching goal that can be used to evaluate the relative importance of all the minor tasks they face every day. If there is a goal or meaning to life, we have yet to find it. Without a single unifying goal to life, rationality must eventually break down. The goals we pursue are ultimately arbitrary.

The difference between the words “clever” and “wise” captures this problem nicely. We are able to cleverly solve even very difficult problems. Our choice of problems to solve, however, is often unwise.

Responses

  1. Thomas says:

    February 21st, 2009 at 1:33 pm (#)

    Stephen,

    I think you need to work through this concept a little more. It’s fundamental to the behaviour that drives both individual economic activity as well as the aggregated activities that appear across groups. Maybe I’m missing the point of alternative economics, but the definition of rationality calls for a more formal logical architecture before you can draw robust conclusions about it.

    Keep it coming!
    - Thomas

  2. verdanafett says:

    December 23rd, 2009 at 3:17 pm (#)

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