Chapter 7 (pt.2)
RATIONALITY AND PLANNING
Individuals Are Variable Actors: I use the word 'variable' here in both of its common senses: individuals are not all the same, and each is not the same over time. These statements are true both psychologically and sociologically. Here the weight of emphasis will be put on consideration of the sociological variance, although the two are not totally separable. It has long been an assumption of much macro-organizational theory that all individual variation is essentially psychological and may be viewed as either constant or equally (randomly) distributed. In particular, theories which treat individuals as rational tend to assume that this has the same meaning for all different individuals in any given situation. One artifact of such a view is that it allows for the treatment of situations as artificially discrete. The involvements of any given individual outside a given situation of choice are not brought into the consideration of that situation. It is assumed that the parameters of the situation define the parameters of the choice. Thus surveys of individual preference among the immediate objects of choice in the abstract are seen as sufficient to determine rates of individual variation in, say, a consumer situation. Consumer situations (like others) however, vary on the extent to which they are discrete from the standpoint of the consumer, just as consumers vary on the extent to which they make choices as discrete actors. These variances become readily apparent when choice situations are viewed in a comparative perspective.
To take a very trite example, an individual in Taleland looking to secure land (or a wife, or a loan) will be greatly constrained in his decision by factors not intrinsic to the single immediate object of choice. He will be concerned not simply with the characteristics of the land as suited or not suited for farming productivity but also with its socio-geographic locality, his relations to its present user, if any, and with its mystical suitability. An American farmer (or suiter, or would-be debtor) is likely to pay much more narrowly focused heed to the object at hand, and particularly its utilitarian value.
One major aspect of this variance among individual actors is that which stems from varying social bonds and commitments. We have phrased some of this variance in terms of Gluckman's distinction between multiplex and monoplex bonds, and clearly it is also a matter of extent. A tie between two individuals as trading partners or market competitors will produce different social action on each of their parts if it is their only link than it will if they are also linked by relations of kinship, common participation in some corporate organization or informal friendship relations. We shall take up below a variety of the ways in which individuals are variable actors, but it is important to make explicit the role of variance in the actual skill of rational analysis, particularly as it relates to the life-cycle, and more generally to change and learning.
Rather than being a universal attribute of human thought, rationality, as we have defined i, is something which individuals do either more or less, and with either more or less skill. Quantity and quality, it should be noted are not necessarily related here. One of the questions broached by an assumption of rationality is that of the extent to which individuals invest effort in attempting to explore and assess alternative courses for action or interpretation of evidence. In this regard Simon has suggested that bureaucratic administrators must "satisfice because they have not the wits to maximize" (1957, p. xxiv). In another circumstance, Evans-Pritchard has answered his question of 'why do Azande continue to believe in their witchcraft despite apparent contradictions?' with (among others) the consideration that they do not compare the various events in the search after consistency which we have come to identify with rationality and science (1937, pp. 475-8). In neither of these cases is it the ability of individuals to make rational calculations in the absolute which is at issue, rather it is the scope of their application of 'rational' techniques to particular issues in complex social situations.
Implicit in Simon's statement, however (and somewhat more explicit at other points in his work), is the notion that there are limits to the scope of decisions which individuals are able to handle rationally. For Simon, bureaucracies are efficient because they limit the problems with which individuals have to deal and require only a certain moderate level of quality in the dealings. In effect, you don't have to be very smart to be a bureaucrat. As a corollary to this we may note that there are variances in the extent to which people (and bureaucrats) are smart, although bureaucracies do not necessarily maximize either this variance or its potential benefits (presumably in order to minimize its potential losses). In general, we may suppose that the bureaucracies to which Simon refers do not intentionally create this limited risk maximization (satisfaction) at all levels, but rather it arises as an unintended consequence of other aspects of their organization. Certainly in other varieties of social organization, such as that of the Tallensi, one of the important 'latent functions' in the organization is the limitation, through a variety of means, of the range of free action which any individual has. This includes the limitation of his ability to disrupt the system as well as to maximize any personal ends. Such a maximization, we may note, would almost necessarily involve both short-ter planning and considerable risk, as opposed to the long-term conservative planning involved in 'satisfaction'. Simon's comments may well be further generalized, as we note that in no real human social situation can any individual actors have the wits to maximize any but the shortest range of ends. Though people may not always be constrained to satisfice, they still always lack the wits to maximize.
'Pure rationality' as it is phrased in utilitarian and marginalist discussions refers to the maximally smart rational actor (from the point of view of the analyst), that is, the one who is able to gain the greatest benefits at the least expense in an situation. As we suggested in chapter 5, however, where considerations of intentional action are concerned it is untenable to adopt any definition of social situations that is not actor-centered. There is a further problem. In calculations, this maximal rationality and intelligence tend to be extended to all actors, thus making the course of purely rational action of any one actor dependent on the pure rationality of all his fellow actors. Aside from other critiques which have been levelled against the notion of 'pure competition', we must ask whether the concept can absorb consideration of variance in the intelligence of actors, even purely competitive actors. This is not just a matter of quality of information, but of the ability to deal with information. It is apparent that 'pure competition' as discussed in the literature assumes equal rationality as well as equal competitiveness, and that equal rationality assumes (although rather complexly) equal intelligence. It is only these assumptions of equality which allows the construction of predictions of outcome in competition based purely on the differential resources of the actors. Once we recognize this, we see that the applicability of concepts of pure rationality to the real world depends on the equality of the analytic or information processing faculties of the individual actors. In other words, the conceptualization approaches accuracy only as the world approaches mass interchangeability of social actors.
Variance in rational skill and variance in social bonds may both tend to become less significant as one approaches mass society, and theoretically could all but disappear. Another form of variance, though it may be affected by mass society, can never be eliminated. This is individual changes in skills, and rationality, particularly changes associated with the life-cycle in its various culturally defined forms, or with cumulative learning. Briefly, there are three aspects to this: first, the increase of skill which generally accompanies progress through the various life-cycle demarcations and aging; secondly, the decrease in potential which accompanies advancement and aging; and thirdly, alterations in perspective which are not directly the result of either skill or potential.
The first of these aspects is a commonplace, especially when we think in terms of early childhood development (e.g., Piaget's (1924) consideration of the genesis of various forms of perceptual and reasoning faculties) or in terms of a simple demarcation between childhood and adulthood. Seen as an overall variable, however, it is nonetheless an affront to the simply rational man assumed by utilitarian theories. Skill varies not only up to the age of five, or fifteen, but throughout life, both as a developmental variable, to a point, and further, as a variable of learning, exercise, practice. Rational decision-making skills are learned both in general and in specific situations or through specific paradigms. In the case of the former, we must include both general learning-to-be-rational itself (e.g., learning to assess alternative courses of action on entering a situation) and the meta-learning which improves abilities to learn new forms of rationality in new situations (Bateson's 'Learning II', 1972: pp. 159-176, 279-308; 'Learning III', a corrective change in the process of Learning II, is also relevant. See summary p. 293). The point here is simple: responses are not all immediate and specific; rationality is not given in the situation but depends on the interaction of actor with situation.
The opportunities for choice that a society offers are not a series of discrete, precisely defined, and clearly labelled situations. Thus, each particular choice and the alternatives it entail can be differently conceived of by different individuals. (Friedland and Cimbala, 1973, p. 56)
There are, though, learnings which are specific to types of situations or areas of focus. For example, a stock broker may be said to behave more rationally on the stock exchange (as market) than does a physicist, although we would not on this basis say that the stock broker is more rational in general than the physicist. We would probably say that most physicists interested in maximizing their investments would if deciding rationally choose to stay out of the market or let their brokers act for them, but there are a number of life-situations in which one has to act for oneself. This number, however, varies from social organization to social organization. One of the characteristics of the specialization of modern society is to narrow the scope in which any individual is expected to be competently rational but at the same time to increase the frequency with which decisions are needed and decrease the predictability of events. Investment managers sometimes worry about the potential impact of large numbers of small investors or speculators on the market, because of their supposed 'irrationality'. Leaving aside the very likely possibility that the investment movements of large investors are, with their so-called herd-instinct, no less irrational, it is apparent that the crucial criterion of this perceived variance in rationality is predictability. Large investment managers doubt their ability to predict the patterns of investment of speculators and small investors. By implication, they trust their ability to predict each other's actions (and with their 'herd-instinct' they make this a self-fulfilling prophesy). It becomes clear that this is not rationality per se which is at issue, but the extent of (especially perceived) common definitions of social situations among actors. Rationality again is seen to be used to refer largely to the equivalence of actors. One can act rationally in a social situation only when one knows what other actors will do, and that one can know only to the extent (among other things) that other actors follow a similar (or otherwise known) system of evaluation. The situation is not unlike that in which a poor chess player can sometimes gain an early advantage over a skilled one because he does not conform to similar conventions of rationality.
In some senses, then, the individual which utilitarian economics defines is an extrapolation from an everyday assumption or appearance. Not least of all, it is a viewpoint we are prone to abstract because of its roots in our own everyday experience. Those actions of which we are most aware are those which are intentional. When we consciously consider action as intended (i.e., when we ask why we did some particular thing and not another) we consider it as a case of the paradigm of rational decision. This does not mean, however, that that paradigm accounts for why we decided to take the action in the first place. The 'rationality' is very frequently an imputation, serving as an explanatory apparatus. So it is with neo-classical economic theory and its sociological descendants. Rationality provides a set of reasons. What it doesn't provide is any indication of their reality. Since it is usually explanation after the fact which is involved, it is easy enough to impute these reasons, this rationality, without considering such complications as contradictory aims and actions or unintended consequences.
The consumer in revealed-preference theory is a 'defined individual', a special kind of homo oeconomicus , whose rationality is presumed axiomatically by virtue of certain definitions. The theory of revealed preference assumes, among other things, choice without conflict -- which is formulated by the transitivity of choice -- and excludes learning processes during the observation period -- as formulated by the axiom on consistency. (Kroeber-Riel, 1971, p. 341)
It is readily apparent why utilitarian theory (including all theory of a rational market or a metaphor to it) must assume a universally rational actor: prediction founders without such universal equivalence, just as it founders (for precisely the same reason) when faced with the complexities and rapid changes of the modern world. This world is not very different for social actors than for professional analysts. It is rather different from that of traditional Tallensi society.
The series of decisions which we make regarding our intentional action are also affected by alterations in individual rationality over time. Certainly the variety of sociological and psychological changes associated with the life-cycle are prime among these alterations, but there are others. For example, an individual's assessment of the possible, or of the admissibility of evidence may change, and in either case his rational decisions would change accordingly. Changes of patterns in the formation of perceptions or conceptions may occur as well, thus in effect changing the (constructed) world in which the individual considers his alternatives for action. We have noted that the 'universalist' sense of the term 'rationality' supposes a certain equivalence among actors in order that each actor may (with equal confidence) plan the course of his action. This assumption tends to be replicated on an individual level (or perhaps the theoretical conception is a product of the individual tendency) when we project onto others motives similar to those of which we are aware in ourselves in order to predict their behaviour. On occasion we may be more sophisticated than the utilitarians and develop typologies in our everyday theories of personality. Whatever our procedure, though, it is likely to be influenced not only by our formal or informal learning about others, but by our understanding of motivations in ourselves. If in the course os psychotherapy, say, we come to change our picture of our own motivations, particularly if we adopt an elaborate interpretative scheme (such as that of one of the schools of psychoanalysis), we are apt to change our perceptions of other people's motives as well as our own. In other words, psychoanalysis is likely to change both our conscious (as we acquire a new world-view and vocabulary) and unconscious (to the extent that our psychological organization is actually altered) projections of our motives onto others. Projection (of some sort) is no mere pathology, but an essential element of social interaction. We operate well to the extent we can 'understand' or predict the actions of others without actually knowing them. To the extent that their actions became inexplicable or unpredictable, the efficiency of our social intercourse is reduced.
It is apparent as well that the attempt to acquire sufficient empirical evidence on each person with whom we must deal to be able to predict their behaviour on the basis of it is a huge and inevitably inadequate enterprise. At some point commonality (or simple unpredictability) must be assumed, and the search must be stopped. The extent of its inadequacy is an important sociological variable.
Problems of Utilitarian Rationalism - Individuals are Variable Actors - Individuals are Complex Decision-Makers - Individual Actions Have Unintended Consequences - Time Spans and Plans - The Insufficiency of Rational Social Organization