Economics as a Multi-Paradigmatic Science: the ‘Best Kept Secret’ of Irrational Choice

The article reexamines the prevailing perception of traditional economics as the science of rational choice among contemporary economists and sociologists, especially rational choice theorists. It proposes that conventional economics is not exclusively the theory of rational choice but also one of irrational choices in the economy. The article aims to contribute toward a fuller understanding and appreciation of classical and neoclassical economics, especially among sociologists, as composite rational choice-irrational choice theory and in that sense a multi- rather than single-paradigm science, thus no different from sociology and other social (and physical) sciences. This may be relevant or interesting to sociologists given that their rational choice colleagues, like economists, extol the “virtues" of conventional and modern economics as a single-paradigm, theoretically unified science around “rational choice” and criticize the “vices” of sociology as plagued by competing paradigms and theoretical disunity. The article supports many economic sociologists’ view or intuition of conventional economics as complex rational-irrational choice theory and multi-paradigm science, and disconfirms rational choice theorists’ interpretation and generalization of it as “rational choice theory” only and single-paradigm unified science.     

What is the Main Significance of Economic for Sociological Theory?

This paper reconsiders classical and neoclassical economics’ significance for or affinity and convergence with sociological theory. The paper identifies certain types or elements of classical and neoclassical economics that are potentially significant or convergent with sociological theory: pure market economics, the economics of society cum the “rational choice model”, and social or sociological economics. First, it argues that as pure economics economic theory’s significance for or affinity and convergence with sociological theory is low because the first is inconsistent with or divergent from the latter, notably theoretical economic sociology. Second, the paper suggests that as the economics of society economic theory’s significance for or affinity and convergence with sociological theory is non-existent or minimal, because the “rational choice model” is missing or an exception within conventional economics. Third, the paper proposes and demonstrates that classical and neoclassical economics’ main significance for or affinity and convergence with sociological theory lies in social economics as its second ingredient, alongside market economics. The paper aims to contribute to a better understanding of the relationship between economic and sociological theory and economics and sociology overall.     

Rational Choice Theory or Pretense? The Claims,Equivalences, and Analogies of the “Economic Approach to Human Behavior”

The article argues and demonstrates that classical–neoclassical economics generally does not pretend or claim that its principles apply to domains beyond the economy, specifically wealth, and does not equate the economic and the noneconomic, and the rational and the nonrational. By contrast, the “economic approach to human behavior” or “rational choice theory” precisely does this to legitimize itself by invoking classical–neoclassical economics as supreme authority and its representatives as venerable precursors. The article reveals the economic approach to human behavior as a set of grand theoretical and methodological claims, equivalences, and analogies from the standpoint of conventional economics itself, as well as sociology and other social sciences. It identifies and examines certain indicative instances of such tendencies. The article aims to contribute to understanding better the relations—or rather lack thereof—between conventional economics and contemporary economic and sociological rational choice theory. The economic approach to human behavior is not new, even outside the market sector. The rational choice model provides the most promising basis presently available for a unified approach to the analysis of the social world by scholars from different social sciences. — Gary Becker With respect to those parts of human conduct of which wealth is not even the principal object, to these political economy does not pretend that its conclusions are applicable. — John S. Mill But economy does not treat of all human motives. There are motives nearly always present with us, arising from conscience, compassion, or from some moral or religious source, which economy cannot and does not pretend to treat. These will remain to us as outstanding and disturbing forces; they must be treated, if at all, by other appropriate branches of knowledge. — William Jevons A science, therefore, based on the hypothesis (of universal rationality) would yield a general form of the social phenomenon having little or no contact with reality … — Vilfredo Pareto     

Comparing Varieties of Agency Theory in Economics, Political Science, and Sociology: An Illustration from State Policy Implementation

As rational choice theory has moved from economics into political science and sociology, it has been dramatically transformed. The intellectual diffusion of agency theory illustrates this process. Agency theory is a general model of social relations involving the delegation of authority, and generally resulting in problems of control, which has been applied to a broad range of substantive contexts. This paper analyzes applications of agency theory to state policy implementation in economics, political science, and sociology. After documenting variations in the theory across disciplinary contexts, the strengths and weaknesses of these different varieties of agency theory are assessed. Sociological versions of agency theory, incorporating both broader microfoundations and richer models of social structure, are in many respects the most promising. This type of agency theory illustrates the potential of an emerging sociological version of rational choice theory.     

The Rational Choice Generalization of Neoclassical Economics Reconsidered: Any Theoretical Legitimation for Economic Imperialism?

The article reconsiders the generalization of neoclassical economics by modern rational choice theory. Hence, it reexamines the possible theoretical grounds or lack thereof within neoclassical economics for economic imperialism implied in much of rational choice theory. Some indicative instances of rational choice theory's generalization of neoclassical economics are reviewed. The main portion of the article addresses the question as to whether neoclassical economics allows its generalization in rational choice theory and thus legitimizes economic imperialism. Presented are a number of pertinent theoretical reasons why neoclassical economics does not fully justify its generalization into rational choice as a general social theory, particularly into an overarching economic approach to social action and society. Also discussed are some theoretical implications of the rational choice generalization of neoclassical economics. The main contribution of the article is to detect lack of a strong theoretical rationale in much of neoclassical economics for rational choice theory's manifest or latent economic imperialism.     

Homo neurooeconomicus

Some years ago researchers in economics have started to adopt neurological techniques like functional magnetic resonance imaging (fMRI) especially in game theoretic research-settings founded on mainstream rational choice theory. They aim to pinpoint neural activities in human brains while exposing individuals to certain stimuli (social dilemma games, choices of brands or impact of commercials). To their surprise researchers find parts of human brains involved in the observed decision making processes that normally generate emotions or are designed to store culturally acquired social preferences. In other words: neoclassical rational choice theory is discovering emotions, neural correlates of cultural predispositions and other non rational strategies of decision making processes in human brains. These findings that are acclaimed as a paradigmatic revolution and nonetheless interpreted as a confirmation of the leading rank of economics in social sciences are increasingly fascinating representatives of management and marketing. The pragmatic illusion of shortcuts into consumer brains has led to the inauguration of a specious variation of neuroeconomics named ?neuro-marketing”. Neither the admonition of leading neuroscientists and neuroeconomists nor the apparent triviality of most of the results are accounted for. Beyond this neoclassical rational choice theorist ignore the underlying scientific as well as pragmatic messages of these observations: the fact that sociology, economics, psychology and neuroeconomics tend to mutually validate their respective findings as social correlates of brain-activities and vice versa.     

Is rational choice humanity’s most distinctive trait?

The Greeks and the thinkers of the Enlightenment regarded reason as the defining quality of humankind. The Utilitarians limited it to the selection of means to any given end for action excluding the determination of moral values and social institutions. This became a postulate of classical and neoclassical economics borrowed by rational choice theory in sociology. James Coleman accepted as rational any action based on the actor's belief in its rationality, which would not rule out the delusions of psychotics. Despite this and other concessions that treat almost any explicable action as rational, sociologists have correctly criticized rational choice theory for ignoring the pervasive effects of socialization in achieving the internalization of norms and values. Rational choice theory also fails to illuminate human emotions and motivations, pictured in their full complexity in great literature.     

Paradigms for analysis of social institutions: A case for sociological institutionalism

This paper makes a case for sociological institutionalism, particularly its Veblenian variant or connection. This is attempted against a background of the surge of renewed interest in analyzing institutions within modern social science, especially economics and sociology. This is indicated by the emergence of the new institutional economics as the (modified) neoclassical approach to institutions and the revival of economic sociology with its conception of the institutional embeddedness of the economy, respectively. Still, many pertinent differences between economic and sociological institutionalism are overlooked or minimized in the current literature. By exploring such differences, the paper helps span a gap in the literature in which comparative analyses of economic and sociological approaches to institutions are rare.     

A DESIGN OF NORMATIVE SOCIOLOGY BASED ON THE RATIONAL CHOICE PARADIGM

Abstract  In this paper, I metatheoretically examine a design of normative sociology. Normative sociology is the normative-scientific study in sociology. The substance of normative science is the conceptual examination of values or value judgments. According to Coleman (1974) and Faran, (1989) et al., sociologists should contribute to normative science by using ideas from general sociological theory. There is a useful traditional enterprise for this aim in sociology; that is the study of the problem of order, particularly the study of it based on the rational choice paradigm. Seiyama (1992) points to the limits of the rational choice paradigm. I propose three aims of social theory, and claim that the study of the problem of order based on this paradigm is useful when our purpose is normative model-building. I call the problem of order as a subject of the study for this purpose "the value-theoretical problem of order." This examination can clear up some of the theoretical confusion surrounding the problem of order and show the methodological basis of normative sociology based on the rational choice paradigm.     

Is sociology the science of the irrational? Conceptions of rationality in sociological theory

This paper explores the role of the concept of rationality in (especially classical) sociological theory. This exploration is prompted by widely held views, especially among economists and rational choice theorists, that classical sociology is the science of the irrational lacking a conception of rationality. By using pertinent examples (mostly) from classical and post-classical (or early contemporary) sociological theory, the paper casts serious doubt on such claims. Specifically, classical sociological theory is characterized by the following features in analyzing rationality: conceptual and methodological pluralism, theoretical and empirical richness, treating rationality as a complex social phenomenon, differentiating economic and noneconomic rationality, acknowledging the social character and foundation of (economic) rationality, and contrasting epistemological or scientific rationality and ontological or reallife irrationality, including the revelation of the irrationality of extreme (economic) rationality.     

Reexamining economic sociology: Beyond rational choice reductionism

The article aims at reexamining the origins and character of economic sociology by comparison with rational choice within the history of economic and social ideas, particularly neoclassical economic and classical sociological theory. Some suggestions for a rational choice approach to economic sociology are particularly curious in that they tend to conflate the distinct characters and origins of these two disciplines throughout this history and have in turn provided an impetus for this reexamination. Modern rational choice theorists display a predilection for reducing economic (and, all) sociology into an economic approach to human behavior, with many economic sociologists evincing some degree of lenience or benevolence vis-à-vis such tendencies. Both tendencies do not seem justified in light of the different nature and origin of economic sociology and rational choice in the history of social and economic ideas. Since the current literature lacks coherent attempts at specifying the nature and historical roots of economic sociology versus those of rational choice, the article contributes toward filling in this hole.     

A feminist critique of rational-choice theories: Implications for sociology

I consider the relationship between two currents affecting sociology, rational-choice theory and interdisciplinary feminist theory. In particular, I consider how the feminist critique of the separative model of self applies to one version of rational-choice theory, neoclassical economics. In discussing this I identify four assumptions of neoclassical economics: selfishness; interpersonal utility comparisons are impossible; tastes are exogenous and unchanging; and individuals are rational. I argue that each of these harmonizes best with a view of separate rather than connected selves, and that this imbalance distorts theories, particularly those that claim to understand women’s experience. These distorting assumptions are less prevalent in sociology than in economics, but some of them are implicit in some versions of sociological rational-choice and exchange theories. I conclude by using research on marital power to illustrate how removing distorting assumptions and bringing questions about separation/connection to center stage can help illuminate sociological research. Her forthcoming book,Comparable Worth: Theories and Evidence (New York: Aldine deGruyter), discusses this controversial policy issue from a perspective that draws upon sociology, economics, and feminist theory.     

Sociology's misfortune: disciplines, interdisciplinarity and the impact of audit culture

This paper is about tendencies to the subversion of sociology as a discipline. It connects external factors of the wider socio-political environment of higher education in the UK, especially those associated with the audit culture and new systems of governance, with the internal organization of the discipline. While the environment is similar for all social science subjects, the paper argues that there are specific consequences for sociology because of characteristics peculiar to the discipline. The paper discusses these consequences in terms of the changing relationship between sociology and the growing interdisciplinary area of applied social studies as a form of 'mode 2 knowledge'. It argues that while sociology 'exports' concepts, methodologies and personnel it lacks the internal disciplinary integrity of other 'exporter' disciplines, such as economics, political science and anthropology. The consequence is an increasingly blurred distinction between sociology as a discipline and the interdisciplinary area of applied social studies with a potential loss of disciplinary identity. The paper concludes with a discussion of how this loss of identity is associated with a reduced ability to reproduce a critical sensibility within sociology and absorption to the constraints of audit culture with its preferred form of mode 2 knowledge.     

Reconsidering equilibrium: a socio-economic perspective

Equilibrium is one of the most venerable concepts of neoclassical economics. In this paper we undertake a critical reconsideration of the concept of equilibrium within the framework of socio-economics (or economic sociology) as an analysis of the social nature, composition, and co-determination of the economy. The concept of market-economic equilibrium is critically reconsidered on the following grounds: its static implications, its spurious equation with optimum, its complex relations to social equilibrium, and its social co-determination. The conclusion is that the concept of (especially general) market equilibrium is of questionable explanatory value from the perspective of socio-economics.     

Max weber's vision of economic sociology

Max Weber's economic sociology is usually associated with The Protestant Ethic and the Spirit of Capitalism (1904–1905), but in this paper I show that what Weber himself called his “Wirtschaftssoziologie”, or economic sociology, looked quite different and was something that he developed during the last year of his life, 1919–1920. I present and outline Weber's (later) economic sociology and pay particular attention to his ideas of “economic (social) action” and of the three different forms of capitalism (rational capitalism, political capitalism and traditional capitalism). I also show that to Weber, economic sociology was part of a more general science of economics that he often referred to as “social economics” (“Sozialökonomik”). The paper ends with a comparison between the paradigm of economic sociology, which can be found in the work of Max Weber, and the paradigm of what is known as New Economic Sociology.     

Socio-economics and rational choice theory: Specification of their relations

In this paper an attempt is made to put the relationship between socio-economics and rational choice theory into proper perspective. The attempt is motivated by some recent confusions between the two. In particular, there is a tendency among the adherents of rational choice theory to subsume socio-economics and, for that matter, social science as a whole under their theory. On the other hand, many socio-economists or economic sociologists evince some degree of lenience vis-à-vis rational choice theory as if the latter were fully compatible with their discipline. We show that the rational choice reduction of socio-economics and sister disciplines (e.g., economic sociology) to the “economic approach to human behavior” or to a utilitarian paradigm of socio-economic life, is theoretically and methodologically untenable, and thus that many socio-economists' generous attitude to rational choice theory is not entirely justified.     

Toward a political sociology of privatized punishment: Contestation,state structures,and stratification

Privatized punishment—in which nonstate actors carry out state-mandated criminal punishments—has developed into a common practice since its rise in the 1980s. Many disciplines, including criminology, political science, public administration, and economics, have examined its use over the past four decades. However, privatized punishment has not garnered much attention in sociology. This is surprising, as privatized punishment touches on the key themes in sociology, and in the political sociology in particular. In this paper, we attempt to insert privatized punishment into classic and contemporary discussions in political sociology. Below, we offer an overview of privatized punishment and provide a high-level review of how other social scientific disciplines have studied the phenomenon. Then we argue that political sociology provides a useful, if underutilized, lens for studying privatized punishment. In particular, we highlight three political sociological themes—contestation, state structures, and stratification—that can be fruitfully applied to the study of privatized punishment, and we sketch multiple lines of future research informed by these themes.     

Interpersonal trust and voluntary associations: examining three approaches

The relationship between interpersonal trust and membership in voluntary associations is a persistent research finding in sociology. What is more, the notion of trust has become a central issue in current social science theorizing covering such diverse approaches as transaction costs economics or cognitive sociology. In different ways and for different purposes, these approaches address the role of voluntary organizations, although, as this paper argues, much of this thinking remains sketchy and underdeveloped. Against an empirical portrait of this relationship, the purpose of this paper is to assess such theorizing. We first set out to explicate major approaches to trust in economics, sociology and political science, using the non-profit or voluntary organization as a focal point. We then examine the various approaches in terms of their strengths and weaknesses, and, finally, identify key areas for theoretical development. In particular, we point to the social movement literature, the social psychology of trust, and recent thinking about civil society.     

Spencer is dead, long live Spencer: individualism, holism, and the problem of norms

The debate between the advocates of sociological individualism and those of holism has been pervasive in the development of social theory. This debate is often situated in the false problems of sociology, since it is seen as a particular form of the perennial and irresolvable dilemma between social nominalism and realism, as well as between freedom and determinism. Nevertheless, the debate is far from over within contemporary sociology and other social science, as indicated by the resurgence of individualism in rational action theory and its repudiation by holistic social theories. The aim of this paper is to identify some modern variations on this theme as well as to discern certain common tendencies of two seemingly opposite theoretical perspectives, viz. the convergence upon a normative solution to the problem of social order. This convergence is therefore denoted normative convergence between sociological individualism and holistic sociology.     

The discovery of participatory research as a new scientific paradigm: Personal and intellectual accounts

The article presents considerations for the placing of participatory research in the practice of sociology. The changing conditions in contemporary society have compelled social scientists to rethink the way social theory has been conceptualized and has been practiced in relation to social change. Modernist social theory, of which sociology is a prime example, has been imbued with the biases of the Enlightenment that privilege the essentialized male rational actor set above the ordinary people. As a consequence it has produced narratives and practices that are not in the interest of the people, especially those who have been dominated and oppressed. In order to live up to the potential of sociology as a vehicle for the improvement of social conditions, it must include the interest and the wisdom of the people in its researching and theorizing activities. It is argued that participatory research provides an opportunity to follow this course in sociology. Participatory research, it is contended, will lead to a paradigm shift in the social sciences because it is based on an expanded conception of knowledge and because it changes the relationship between the researcher and the researched and between theory and practice. Arguments are drawn from the history of science, critical theory, and postmodernist and feminist critiques. Peter Park is currently on the faculty of the Fielding Institute.