Anthropology, Economics, and Choice

Introduction

Introduction Three decades ago Gary Becker wrote a book in which he made extraordinary claims about the usefulness of economic approaches for the understanding of questions in social sciences. In a now-famous introductory essay to The Economic Approach to Human Behavior (1976), Becker succinctly states his views: I have come to the position that the economic approach is a comprehensive one that is applicable to all human behavior, be it behavior involving money prices or imputed shadow prices, repeated or infrequent decisions, large or minor decisions, emotional or mechanical ends, rich or poor persons, men or women, adults or children, brilliant or stupid persons, patients or therapists, businessmen or politicians, teachers or students. (8) By “the economic approach” Becker means one in which “all human behavior can be viewed as involving participants who maximize their utility from a stable set of preferences and accumulate an optimal amount of information and other inputs in a variety of markets” (14). He asserts that his approach provides a “unified framework for human behavior” that was sought by but eluded such renowned thinkers as Jeremy Bentham , Auguste Comte, and Karl Marx. In modified form, the types of analysis advocated by Becker have become increasingly influential in the social sciences. In this book I examine the advantages and disadvantages of this “economic” approach to diverse practical problems involving decision making. I contrast this approach with “anthropological” analyses that focus on the historical changes, cultural norms, and socioeconomic institutions that constrain the choices 2 Anthropology, Economics, and Choice possible for different groups of people at particular places and times. My principal argument is that the methods of economics alone are insufficient for understanding the complexities of choice. Economic and Anthropological Approaches to Choice Becker’s book, filled with graphs and equations, was written primarily for economists. His definition of an “economic approach” would be likely to mystify noneconomists unsure about the technical meanings of “utility,” “preferences,” “inputs,” and “markets.” Even readers familiar with the language of economics might wonder how anyone could possibly know when utility is being maximized, what it means to say that preferences are “stable,” and what exactly is an “optimal” amount of information. In 1992 Becker won the Nobel Memorial Prize in Economic Sciences “for having extended the domain of microeconomic analysis to a wide range of human behaviour and interaction, including nonmarket behaviour .”1 As Becker hoped, economic approaches have become prominent in fields such as political science and are now also of some importance in sociology, geography, and history. Such approaches are often lumped together under the term “rational choice theory,” a reference to their assumptions about utility maximization. An enormous scholarly literature (among others, Elster 1989, Gigerenzer 2008, Parsons 2005, Schweers Cook and Levi 1990) describes rational choice theory and debates its merits. There are also numerous books aimed at general readers that popularize the basic ideas of the theory. Some of these books (for example, Becker and Becker 1997; Harford 2005, 2008; Levitt and Dubner 2005) describe insights gained from applications of rational choice theory; others (including Gladwell 2005, Groopman 2007, Lehrer 2009, Thaler and Sunstein 2008) pay more attention to the theory’s limitations. Many of the critics of economic approaches in social sciences emphasize findings from experiments in cognitive psychology that show that people often make suboptimal choices. Rational choice theories have certain features that make them attractive to scholars advocating “scientific” approaches to social phenomena. Their focus on a restricted number of key variables can allow hypotheses to be tested in controlled situations. The mathematical elaboration of these theories provides clear statements of suggested relationships among different variables. Many ethnographically oriented anthropologists , however, are repelled by the very features that make rational choice Introduction 3 theories appealing to many economists and political scientists and intriguing —if debatable—for many psychologists. The reliance of rational choice theories on a limited number of assumptions is diametrically opposed to an entrenched holistic anthropological tradition that stresses multiple interrelated influences on cultural practices.The underlying idea that humans everywhere have similar motivations conflicts with anthropologists ’ longtime emphasis on cultural diversity. The methodological individualism typical of most applications of rational choice theory is unacceptable to both anthropologists focusing on supra-individual characteristics of groups and institutions and those whose research examines how history and political economy influence cultural practices. The treatment of “preferences” in rational choice theory illustrates why so many anthropologists are uncomfortable with economic approaches...