On institutional rationality.

Author:Redmond, William H.

This paper develops a concept of rationality which is consistent with the institutional approach to human behavior. To many the term rationality has come to be associated with one particular thesis of mental operation, namely the maximizing neoclassical model, also known as rational choice theory. In fact, rationality is a considerably broader topic. Many alternate theories of rationality exist and have been well developed and well accepted in their respective literatures. Even the maximizing model of rationality comes in variants, including the descriptive/predictive variant favored by orthodox economists and the normative variant favored by many sociologists and political scientists (Levi, Cook, O'Brien, and Faye 1990). Differences in basic models of rationality, as well as variants thereof, reflect and embody each field's assumptions and investigative objectives.

In the most general terms, rationality is descriptive of mental processes which consciously strive to master reality (Kalberg 1980; Swedberg 1998; Huber 1977). It is what makes for human agency in human affairs, as opposed to other possibilities such as divine intervention. While better known as a proponent of instincts, Thorstein Veblen also treated rationality, and his own notion of rationality included an inhibitory (self-controlling) mode in addition to an "activistic" (proactive) mode (Kilpinen 1999). In institutional thought, human relations and institutions play a prominent part in reality. Consequently an institutional conceptualization of rationality should comfortably handle behaviors such as habit and routine, emulation, institutional stability, and so forth.

The Nature of the Institutional Mind

In order to advance any notion of rationality, one must proceed from some basic assumptions about the human mind. Two such are outlined here for purposes of contrast.

Metaphysical Mind versus Organic Mind

Systems of rationality are founded upon particular sets of assumptions which detail key features of the operation of the human mind. These sets of assumptions spring from quite different intellectual traditions, thereby producing distinctive differences in the resulting models. Tracing backward through rime one sees the sources of assumptions, often implicit in the current versions, which constitute core elements of rationality models.

The neoclassical model for example is the product of an extended developmental history--essentially a process of cumulative causation. The neoclassical model of the human mind derives from the classical model, which derives from that of eighteenth century philosophers, which, in turn, was based upon foundations laid out by Rene Descartes (Bush 1993). Cogito, ergo sure. (1) The individual thinker is the starting point of philosophy, and introspection forms the foundation of what is knowable. This thinking mind was held to be endowed by its Creator with unique properties and special powers, literally a case of pure reason. Indeed this mind was held to be so different in kind and character from the ordinary physical world that the mechanisms of its connection to the corporal body raised difficult conceptual issues. This was the famous philosophical problem of mind-body dualism, or what Clarence Ayres referred to as metaphysical dualism ([1944] 1962).

It is from this distant intellectual tradition that the neoclassical model of rationality emerged (Bush 1993). Despite having passed through many hands, the neoclassical model maintains continuity with the Cartesian in two essential respects: the dominating centrality of the individual and the supra-natural power of human cognition.

Evolutionary theory is a separate and distinct intellectual tradition, and one would naturally expect a considerably different view of the human mind. Among other differences, evolutionary theory is based on observation rather than introspection. Darwinism has had an effect on the social sciences as well as the biological, but its impact on the former has been both less dramatic and more uneven. Veblen's "Why Is Economics Not an Evolutionary Science?" (1919) offered some thoughts as a critique of orthodox economics (Peukert 2001). However, the present paper is concerned with states of mind rather than disciplines.

One consequence of Darwinism is that metaphysical explanations are no longer viable foundations for conceptualizing the human mind. The brain is an evolved organ, responding to environmental pressures by adaptational processes in the same manner as other bodily organs. Among other things, acceptance of the evolutionary thesis implies that the human mind is not a separate type of mental substance. (2)

The late philosopher Robert Nozick is regarded as a contributor in the tradition of American pragmatism. In The Nature of Rationality, Nozick explored implications of evolution for the human mind, specifically in connection with rationality. Rationality is an evolutionary adaptation, an adaptation with a delimited function and purpose (1993). This evolutionary purpose is not maximization of utility but fitness for survival, that is, to better cope with changing circumstances, threats, and opportunities. This rationality involves reasons and beliefs which have adaptational value because, unlike instincts, they are changeable in response to changing circumstances. Hence evolved rationality has the evolutionary function of wide-ranging coping ability (Nozick 1993). Two characteristics of the evolved mind are of particular interest for institutional rationality: limited capacity and social orientation.

The Limited Mind

That the mind has limits is well established through both experience and experiment (e.g., Simon 1982; Tversky and Kahneman 1981; Kahneman 1973; Nozick 1993; Tooby and Cosmides 1992). It is not our purpose here to review the literature on that topic but to highlight three interrelated facts of limitation: limited attention, limited processing capacity, and limited problem-solving ability. Limited does not mean minuscule, but it does mean very far from the lightning calculator. From this perspective cognitive effect can be viewed as a limited resource to be conserved when and where appropriate. In a subsequent section, we argue that evolutionary processes have shaped the human mind in ways that are consistent with conservation of cognitive resources and that the chief mechanism of this conversation is reliance on institutions.

The notion of limits is a familiar one and comes in several varieties including bounded rationality (Simon 1982) and the normative theory of maximizing (Levi, Cook, O'Brien, and Faye 1990; Coleman 1990). It is worth noting that these conceptualizations do not necessarily depend upon Darwinian concepts but stem from routine failures of individuals to maximize in a consistent way. In other words, the notion of limits does not in itself depend strongly on an evolutionary perspective. However, the evolved mind is not simply limited; it is also a social mind.

The Social Mind

Evolutionary processes discriminate in favor of adaptations which succeed under specific environmental conditions. Because a pivotal element in the environment of early humans was the presence of other humans, success in dealings with other humans should be selected for. Indeed the adaptational value of group living makes for positive feedback effects: "The evidence seems strong that the unique features of our brains evolved in large part to solve the problems of living and communicating in small communities of increasingly clever companions" (Ehrlich 2000). Human thinking and acting are governed by rules which have, by a process of selection, evolved in the context of society (Ehrlich 2000). Rules governing social interaction and reciprocity are particularly critical for the success of the group. Cognitive scientists believe that the brain is not a general-purpose calculating machine but rather a highly modular organ with specialized adapted capabilities (Tooby and Cosmides 1992). Experimental results support the argument that evolution has produced specialized reasoning abilities in the human brain, particularly those involving social exchange (Cosmides 1989; Cosmides and Tooby 1992).

The evolved mind displays a distinctly institutional type of rationality, as Nozick explained:

Rationality evolved as an adaptation against a background of stable facts that it was selected to work in tandem with. One such fact is the presence of other creatures with a similarly evolving rationality. Descartes depicts an individual alone in his study determining which of his beliefs could not be false or the product of a skilled deception. His meditations present a procedure that each of his readers is to follow also, alone in his or her own study. However, there is no reason to think that evolution would shape our rationality to conform to such Cartesian individualism. If rationality evolved alongside the concurrent rationality of others, then each person's rationality may have a character that fits it to work in tandem with that similar rationality of others.... In what ways does our rationality use the rationality of others? We are predisposed to learn language from others and also to learn facts that elders show and tell us. (1993, 178) Nozick's notion of social influence on the evolution of rationality is not merely a taking into account of others' intentions and actions, as in a game theoretic type of rationality. It comprises a developmental aspect in which individuals equip other individuals with language skills along with a knowledge base of ideas, rules, and procedures. Such skills and knowledge are highly context specific and thus have the flexibility to be of localized adaptational value. The process of evolution has predisposed individuals to engage in group activities and to produce institutional solutions to a variety of problems (1977). No group studied by anthropologists or sociologists has been found lacking in these...

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