ethics!!!! & economics

I have two points of enquiry:

1. On page 21, Sen discusses two issues that pertain to the problem of modeling based off of self-interest. His first question is “whether people actually behave in a self-interested way” (21). He considers ‘the Japanese ethos’—valuing and being motivated by duty, loyalty, and good will—a very real example of deviation from typical self-interested behavior. Different cultural value systems certainly account for the “plurality of motivations” that Sen suggests might exist. In addition to differences in motivations, limitations on knowledge might also inhibit people from making truly self-interested decisions. In the political sphere, a general lack of knowledge about candidates’ various policy positions might prevent some from making ‘rational’, self-benefitting decisions. In the market sphere, sometimes one person might possess more knowledge than the other person involved in the trade. In both domains, a lack of knowledge (in addition to different motivations) can prevent ‘rational’ (i.e. self-interested) decision-making. Perhaps this model or a model based on multiple motivations is still the best model (for the reason that another model “might lead to more mistakes” (11)); these kinds of deviations might still exist in a variety of models. Nonetheless, a lack of knowledge in either domain poses a practical problem for attaining fully efficient markets.

2. The second point of enquiry is related to the idea of ‘the Japanese ethos’. Wouldn’t it be more helpful to examine trends in decision-making than to assume that individuals who partake in market interactions operate ‘rationally’ according to self-interest? Assuming that people operate solely based on self-interest is unduly theoretical—and perhaps a normative assumption that doesn’t empirically hold across cultures. The common critique that normative analysis (the introduction of ethics) in economics should be “shunned” (7) perplexes me in this context. Though ethics is regarded as a very theoretical field, people’s ethically motivated actions have very tangible results. By ignoring the whole field of ethics, one is essentially ignoring the realities, which point towards multiple motivations—not just self-interest.