Ayn Rand Philosophy, Objectivism, Science, Self-interest

[a500lbgorilla]

I forgot to add that rational behavior in economics is different than the reason the interviewee discusses. Rational behavior in economics is an assumption that people try to maximize their utility. Utility has a different meaning in economics; it's along the lines of "happiness," but it's best to not think of it in the colloquial terms we do. Rational behavior in economics has nothing to do with thoughtfulness. The reason the interviewee discusses is all about thoughtfulness.

I know this. I also know the idea of utility is nonsense for one simple reason - if ever any rational agent made a choice that didn't maximize his utility, you'd never know. And there's no reason to believe that people must always maximize utility.

[wufwugy]

I know this. I also know the idea of utility is nonsense for one simple reason - if ever any rational agent made a choice that didn't maximize his utility, you'd never know. And there's no reason to believe that people must always maximize utility.

If this is nonsense, then all science is nonsense. Everything uses fundamental assumptions that are not testable.

Example: fundamental assumption of science: repeatability of phenomena. Nobody can prove this assumption. Every experiment anybody does, its relevance can to other experiments and to descriptions of nature can only be assumed. Nobody actually knows. Rational behavior theory is on par with this; economists assume what appears to be a fundamental "truth" so they can move forward just like chemists and physicists do in their respective sciences.

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

[MadMojoMonkey]

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

Wow. This might actually be the fundamental reason that economics seems so unrefined to me.

I can think of dozens of examples of people NOT acting to maximize their utility right off the top of my head. (Or maybe I still don't understand your notion of utility.)

In science, if even 1 counter-example can be shown, then the assertion is false. It is discarded and sometimes replaced with a new idea.

OK.

So explain suicide to me. How is this a maximization of utility?

[wufwugy]

So explain suicide to me. How is this a maximization of utility?

Easy: the person feels it's better to be dead than to be alive. Utility maximized.

Rational behavior has nothing to do with facts or wisdom. It has only to do with perceptions.

[MadMojoMonkey]

Easy: the person feels it's better to be dead than to be alive. Utility maximized.

Rational behavior has nothing to do with facts or wisdom. It has only to do with perceptions.

This seems like a naive interpretation of my question, presupposing that everyone who commits suicide thinks it's for the best.
Or at best, it strips the definition of utility down to a wholly subjective meaning, which cannot be objectively evaluated to predict behavior.

The point of economics is still to make predictions, yeah?
How does this definition of utility support your ability to make predictions?

How do you explain self-destructive behavior? People do things which are actively done because of the anti-utility, right?

[wufwugy]

This seems like a naive interpretation of my question, presupposing that everyone who commits suicide thinks it's for the best.

Why would somebody commit suicide except that they think it's for the best? If I remember the history right, one of the breakthroughs in rationality came when Gary Becker (also a Nobel winner) began applying the concept in unorthodox ways. A popular example is heroin addiction. Despite all the drawbacks of shooting up again, if an addict decided to shoot up again, he still acted in such a way that reflects what he wanted the most. Even though it was unwise and even if his decision was influenced by other factors, he still shot up the heroin because he wanted to do so more than he wanted to not do so.

Or at best, it strips the definition of utility down to a wholly subjective meaning, which cannot be objectively evaluated to predict behavior.

Yeah the base assumption is not testable. Many models that go beyond this basic assumption are testable though. I don't know much about the various models. The Kahneman example appears to be one where he challenged one of the more popular models, showing ways in which it is flawed. Or something to that effect.

The point of economics is still to make predictions, yeah?

Sorta. Predictions are involved in the scientific method, but the point of economics still is just description of production, distribution, and consumption of goods and services.

How does this definition of utility support your ability to make predictions?

I'm not sure if I can answer this. My guess would be that it gives direction and provides sense to interpretations. For example, if you assume that people have a statistically related chance of eating burgers when they want to eat burgers, you're in a more sensible spot than if you assume that there is no correlation between desire to eat burgers and burgers eaten. I don't think I know enough to answer this question though.

How do you explain self-destructive behavior? People do things which are actively done because of the anti-utility, right?

If I didn't already, I would use the heroin example. If that explanation doesn't make sense, let me know and I'll try harder.

The short of it is that when you do something, you do it because you want to do it more than you want to not do it. An alternative would be something like "decisions are random" or "people do what they don't want to do."

Confusion can arise because of interpretations of "want." Let's say you have an alcohol problem and you want to quit. You can think of many reasons: it makes you feel worse, you're not sleeping well, you're losing your senses, you're wasting money, etc.. These are all reasons that make you want to not consume that next drink. But then there are other reasons that make you want to consume that next drink: you're in withdrawals and feel like shit, you're used to it, you don't want to change, your dopamine is in the tank and you're jonesin' for that immediate pickup on the first sip, your stress is racking up and you just want a stress free night, etc.. Well, economists say that if you chose to have the drink, you did it because it is what you most wanted when all these sub-wants were weighed. Even though at the time you could be thinking that it's a terrible decision and you're ruining your life, your brain thought, for whatever reason, that the marginal utility of taking that drink was better than not taking it.

[NightGizmo]

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

Have you read Thinking, Fast and Slow by Daniel Kahneman? He won a Nobel prize in economics for basically proving that people are not rational agents that always try to maximize their utility.

[wufwugy]

Have you read Thinking, Fast and Slow by Daniel Kahneman? He won a Nobel prize in economics for basically proving that people are not rational agents that always try to maximize their utility.

As far as I can tell, what he did was help change modelling for how utility is maximized. For example he showed holes in the expected utility hypothesis, which says that the value of a choice is the statistical expectation of the valuations of the outcome of the relevant choices. This doesn't suggest utility isn't maximized, but that valuation is assessed differently than earlier models suggest.

There are versions of rational choice theory that are testable, and they're all flawed. I don't know much about the specific models, and have instead been discussing the assumption behind the theory behind the models. Kahneman didn't "disprove" rational choice theory, but gave more insight into it. Rational choice theory has been used increasingly over the years, presumably because the models "work" even though they don't work perfectly.

[MadMojoMonkey]

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

Well, I assume you don't believe that economics is nonsensical, so..

How can you resolve that "maximize their utility" essentially means "do whatever they feel like doing?"


Or if it doesn't need resolving... can you elaborate (like... a bit... not an essay)?