In a recent column in the Financial Times (“Debt: Another Word for Guilt”, January 14, 2011) Simon Kuper questions the validity of the rational actor model so beloved of economists. He suggests that treating the individual as an isolated figure acting in a void provides little insight into why people behave the way they do. Behavioural economics which cleaves to the notion of the individual actor – albeit an irrational one – is also limited as an explanatory perspective. What’s missing, Kuper suggests is the wider social context within which these actors – rational or otherwise – live their lives. Kuper should try reading some sociology. Sociologists strive to understand not just the individual in relation to his or her social context, but the dialectical process by which the individual shapes but in turn is also shaped by the wider contexts. That is axiomatic to our discipline.
It may be helpful to reiterate here what sociology does, that economics, generally speaking, does not do. Sociologists offer a robust alternative to the kind of reductive rational choice models frequently proffered by economists. According to Therborn (1991) the key difference resides in the conceptualization of the relationship between the individual and his or her context. Rational choice models (favoured by economists) treat actors as given and situations as discriminating: “people act they way they do because their situation is such and such, and they act differently when their situation changes”. In contrast, Therborn observes sociology treats the cultural belonging and structural location of actors as the principal explanatory variables: “people act the way they do because they belong to a particular culture and and/or because they have certain resources to draw upon” , (1991: 188). When sociologists come to interpret social processes (like why people save rather than spend during economic crises) we are therefore, attuned to the particular cultural and social locations of people, the structural context of their action, and the kinds of resources that they can draw upon and that help to shape their courses of action. This of course requires a measured rather than a knee jerk approach to the analysis of human action.
In recent times in Ireland, the sociological perspective has been effectively sidelined in the headlong rush to re-cast the nation and the society as an economy initially on speed, and now junked up and strung out. Privileging an exclusively economic perspective rules out others and has implications not only for our notions of collective identity but how we might conceive of and re-shape our core institutions. Moreover, an economistic perspective that favours the rational actor model promotes the economic self over the social or reflexive self, and privileges the attainment of private economic interest at the expense of the collective good. That’s what happened at the high point of the Celtic Tiger and continues to happen almost unabated in its aftermath. Its time to rein in the rational actor model. We need to begin the process of re-imagining through a more sociologically attuned lens- our economy and our society as well as the political system which underpins them.
Ref: Therborn, G. 1991. “Cultural belonging, structural location and human action: explanation in sociology and in Social Science” in Acta Sociologica 34, pp. 177-191, 1991