The Rationality Straw Man (Updated)

Last week I posted about “breast ironing,” the practice by which young women’s developing breasts are “massaged, pounded, pressed, or patted with an object, usually heated in a wooden fire, to make them stop developing, grow more slowly or disappear completely” in Cameroon. See my original post on the topic for the logic behind the practice, which I do not care to validate further by discussing it again.

In that post, I also discussed female genital mutilation (FGM), explaining how asking someone about their view of FGM was a litmus test of sorts for the limits of that person’s cultural relativism.

Carol Gallo wrote an excellent comment on my post, in which she explained that it is difficult for well-meaning outsiders to understand cultural phenomena like FGM. I responded by explaining how, though I disagree with FGM, I see the practice as rational. After all, if the norm is to have one’s daughter FGMed, not following the norm might lead to a fate worse than following the norm.

This is because of what we call a “multilateral punishment strategy” in economics — the phenomenon whereby norms are enforced by punishing those who do not follow norms, and by punishing would-be punishers whenever they fail to punish the transgressors. See Greif’s (1993) classic article on the Maghribi traders for a theoretical treatment, or read Kaushik Basu’s Prelude to Political Economy for a more intuitive discussion.

Carol responded, further beginning as follows:

Funnily enough, I only half-accept the idea of individual rationality because I see people do things that are terrible for them or make no sense all the time (…).

This brings me to the topic of today’s post.

The Rationality Straw Man

It is de bon ton in the media and elsewhere to condemn economists for their belief in individual rationality. “Bah! Humbug!,” goes the critique, “we know people aren’t rational because they do dumb things, like, all the time…”

But merely declaring that people aren’t rational does not make it so. In economics, individual rationality rests on two assumptions:

Completeness: People can compare two alternatives x and y, and determine whether they prefer x to y, y to x, or whether they are indifferent between y and x, and Transitivity: If someone prefers x to y and y to z, then that person prefers x to z.

That’s it; that’s all. When an economist assumes individual rationality, all she is saying is that people’s preferences are complete and transitive. One can build a very rich theory of individual behavior on the basis of these two seemingly simple assumptions.

Moreover, there need not be an inconsistency between the assumption of individual rationality and doing dumb things. Car surfing is certainly among the dumbest things I can think of, but it’s not irrational — the teenager standing on the roof of his friend’s car might feel the need to prove something to himself or to his girlfriend, which outweighs the perceived risk of injury or death. The person who smokes two packs a day might strongly discount the future.

In other words, “We know people aren’t rational because they do dumb things” does not constitute a valid critique of individual rationality — it is more of a straw man than anything else. I would start here for a critique of individual rationality that has real traction.

Update: Paul Kelleher notes in the comments that what I am talking about is not necessarily a straw man, and that perhaps the right concept to apply here is that of fallacy of equivocation.