The Elgar Companion To Economics and Philosophy
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The Elgar Companion To Economics and Philosophy

Edited by John B. Davis, Alain Marciano and Jochen Runde

The Elgar Companion to Economics and Philosophy aims to demonstrate exactly how these two important areas have always been linked, and to illustrate the key areas of overlap. The contributors are well-known and distinguished authors from a variety of disciplines, who have been invited both to survey and to provide a personal assessment of current and prospective future states of their respective areas of philosophical interest.
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Chapter 3: Economic Rationality

Shaun P. Hargreaves Heap


Shaun P. Hargreaves Heap Introduction The dominant model of individual agency in economics has individuals acting to best satisfy their preferences. This is an instrumental conception of rational action where reason is concerned, not with the ends pursued, but with calculating the action that will best achieve those ends. Its philosophical roots prominently go back to Hume who cast ‘reason as the slave of the passions’ and it quite naturally sits within the wider tradition in political theory of liberal individualism by providing a clear account of what individual qua individual action might consist of. It is also commonly known as either the rational choice or the economic model of action. I discuss this model in the second section. Few would doubt that many actions are well described by this model, but there are real questions over whether all action is captured by it. In particular, there are doubts over whether this model can be used to explain what is perhaps best described as the institutional or normative side of life. There are two aspects to this problem. The first is whether one can account for the origin of institutions using this model. The second is whether the model is sufficiently complex in a psychological sense to allow for how action is connected to self-respect (or other related psychological motivations, see below). People often reflect on their actions and when they find them worthy, they derive a sense of self-worth. It is an anthropological commonplace that such feelings...

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