The forgotten role of the rationality principle in economics
Article [Accepted Manuscript]
Is part ofJournal of economic methodology ; vol. 11, no. 1, pp. 31-51.
Publisher(s)Taylor & Francis
This paper aims to show that, throughout the history of economics, an increasingly wide gap has developed between the rationality principle, usually considered as the fundamental principle of economic science, and the notion of rationality that progressively became a standard component of any model of modern microeconomics. This claim is illustrated through an analysis of the various ways in which ‘rationality’ was understood from classical economics to contemporary debates where axioms such as transitivity and independence, which contemporary economists associate with the notion of rationality, are subjected to a number of devastating critiques. Another claim of this paper is that, while these critiques put the modern notion of rationality seriously into question, they leave the rationality principle undamaged since they were typically made in the name of that principle. It concludes with an argument emphasising the underestimated importance of the rationality principle for economics.