Theoretical Concepts of Economic Rationality

Zdzisław Sadowski
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Zdzisław Sadowski: Institute of Planning

Chapter 3 in The Relevance of Economic Theories, 1980, pp 37-46 from Palgrave Macmillan

Abstract: Abstract Economists are so attached to the idea of economics as a body of knowledge concerning the best possible use of available resources that the concept of rationality seems a sacrosanct cornerstone on which the whole structure rests. But, on close scrutiny, this concept — and its meaning for economics — becomes much less clear. What makes things difficult is probably the fact that the understanding of the role of rationality in economic activity has been undergoing continuous evolution. Two hundred years ago it was possible to assume that man by his very nature acted rationally in his economic life. This assumption eventually became obsolete. Today, it may at best be claimed that, amidst various obstacles and difficulties, man only endeavours (or, perhaps, should endeavour) to act rationally. There is a vast difference between these two assumptions. The first gave birth to an interpretative body of theory, claiming to explain what is. The second may give rise only to theories describing what should be, given additional assumptions on what is desirable.

Keywords: Economic Rationality; Optimum Allocation; Socialist Economy; Goal Function; Money Income (search for similar items in EconPapers)
Date: 1980
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-16443-1_3

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DOI: 10.1007/978-1-349-16443-1_3

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