Sen on Rationality through Preference and Governmental Obligations

Sen asserts that "Human beings are assumed to behave rationally, and given this special assumption, characterizing rational behaviour is not, in this approach, ultimately different from describing actual behavior." (11) His thesis seems to focus on the principle, that everyone responds to incentives, that our econ professors hammered into us in Econ 50. He caveats this thesis by saying that firstly that "it is possible that a view of rationality may admit alternative behavior patters", and secondly that "the issue of identifying actual behaviour with rational behaviour (no matter how rationality of behaviour is defined) must be behaviour as such (11-12).

Rationality through Preference:

One elucidation for "rational behavior" is that people will always act in their own self-interest. Sen debates this view, explaining "The self-interest view of rationality involves inter alia a firm rejection of the 'ethics-related' view of motivation. Trying to do one's best to achieve what one would like to achieve can be a part of rationality, and this can include the promotion of non-self-interested goals which we may value and wish to aim at. To see any departure from self-interest maximization as evidence of irrationality must imply a rejection of the role of ethics in actual decision taking" (15). He evaluates the argument on the next page, writing "The methodological strategy of using the concept of rationality as an 'intermediary' is particularly inappropriate in arriving at the proposition that actual behaviour must be self-interest maximizing" (16).

Sen says that views promoted by people like Stigler are circular and not based in "empirical verification" (18). Sen analyzes the example of Japan, saying that cultural virtues, such as loyalty and duty are equally culpable for the country's successful free market. The Japan example is interesting, but it doesn't afford much new turf for Sen's opponents because it still deals with preferences and utility. The only difference here is that people in Japan include their familial, cultural duties in their preferences. Fulfilling the cultural obligation, at its core, produces a positively reinforced thought process, where the person gets satisfaction - utility - out of knowing that they did their job. On the flip side, if a Japanese citizen neglects their duty, they feel guilt. This guilt detracts from utility. Sen's opponents don't prove anything in this example except that people have different preferences, but that's hardly groundbreaking.

Governmental Obligations:

Shifting gears from the example debate to the bigger picture, Sen also opens up the debate on "the problem of self-interested behavior" (21). He says there are two different issues at hand: whether people actually behave in an exclusively self-interested way, and if this is the case, whether they achieve certain specified successes (efficiency of one kind or another). Sen thinks that some people overzealously misinterpret Smith; these people think that Smith advocates solely for self-interest motivated markets (25). Sen's reply, that Smith would also point "to unemployment and low real wages as causes of starvation" as meriting a societal response backed up with policy (27).

Sen's analysis necessarily builds itself on some interesting assumptions. He says that without necessary programs, under a self-interest paradigm, that people are "led to starvation and famine" (26-27). Here he postulates that 1) starvation and lack of basic necessities is bad, 2) someone has an obligation to right that wrong, 3) failure to right that wrong is an ethical blunder. Sen advocates for "public policy responses"; it follows that Sen wants governmental action (27). On an individual level, if I'm able to save a person who is drowning, and fail to do so, I am wrong. Sen applies the same logic to the government; the government's duty to intervene is a moral obligation. By thrusting a positive, moral burden onto the government, Sen must necessarily establish that governments can be good or bad, not just on an efficiency level, but on a moral level as well. Such a moral imperative must justify intervening in a laissez-faire marketplace where those without resources are condemned to die through no fault of their own. Nevertheless, Sen's call to action first establishes that governments and other authoritarian organizations have one collective moral character, even though they are comprised of individuals, each with their own moral compass.