We often suppose that rationality is ‘a good thing’, but is it always?
Rationality is variously defined as being in accord with reason, logic or ‘the facts’. Here ‘reason’ may mean one’s espoused or actual reasons, or it may mean in accord with some external standards. Thus in its broadest interpretation, it seems that anything that has a reason for being the way that it is may be considered broadly rational. But the notion of rationality derives from ‘reason’, one aspect of which is ‘sound judgement, good sense’. This suggests some external standard.
If we use the term ‘simple’ to denote a situation in which there are definite ‘objective’ standards of soundness and goodness, then rationality in simple situations is behaviour that accords with those standards. Philosophers can argue endlessly about whether any such situations exist, so it seems sensible to define rationality more generally as being relative to some set of standards. The question then being: What standards?
My natural inclination as a mathematician is that those standards should always include the best relevant logics, including mathematics. Yet I have witnessed many occasions on which the use of mathematics has tended to promote disasters, and the advocates of such approaches (apart from those few who think like me) have seemed culpable. I have a great deal of respect and sympathy for the view that mathematics is harmful in complex situations. Yet intellectually it seems quite wrong, and I cannot accept it.
In each case there seems to be some specific failing, which many of my colleagues have attributed to some human factor, such as hubris or the need to keep a job or preserve an institution. But the perpetrators do not seem to me to be much different from the rest of us, and I have long thought that there is some more fundamental common standard that is incompatible with the use of reason. The financial crises of 2007/8/9 are cases where it is hard to believe that most of those pushing the ‘mathematical’ view that turned out to be harmful were either irrational or rationally harmful.
Here I want to suggest a possible explanation.
From a theoretical perspective, there are no given ‘facts’, ‘logics’ or ‘reasons’ that we can rely on.This certainly seems to be true of finance and economics. For example, in economics the models used may be mathematical and in this sense beyond criticism, but the issue of their relevance to a particular situation is never purely logical, and ought to be questioned. Yet it seems that many institutions, including businesses, rely on having absolute beliefs: questioning them would be wasteful in the short-run. So individual actors tend not only to be rational, but also to be narrowly rational ‘in the short run’, which normally goes with acting ‘as if’ it had narrow facts.
For example, it seems to me to be a fact that according to the best contemporary scientific theories, the earth is not stationary. It is generally expedient to for me to act ‘as if’ I knew that the earth moved. But unless we can be absolutely sure that the earth moves, the tendency to suppose that it is a fact that the earth moves could be dangerous. (You could try substituting other facts, such as that economies always tend to a healthy equilibrium.)
In a healthy society there would be a competition of ideas, such that society as a whole could be said to be being more broadly rational, even while its actors were being only narrowly rational. For example, a science would consist of various schools, each of which would be developing its own theories, consistent with the facts, which between them would be exploring and developing the space of all such credible theories. At a practical level, an engineer would appreciate the difference between building a bridge based on a theory that had been tested on similar bridges, and building a novel type of bridge where the existing heuristics could not be relied upon.
I do not think that human society as a whole is healthy in this sense. Why not? In evolutionary theory separate niches, such as islands, promote the development of healthy diversity. Perhaps the rise of global communications and trade, and even the spread of the use of English, is eliminating the niches in which ideas can be explored and so is having a long-run negative impact that needs to be compensated for?
Thus I think we need to distinguish between short and long-run rationalities, and to understand and foster both. It seems to me that most of the time, for most areas of life, short-run rationality is adequate, and it is this that is familiar. But this needs to be accompanied by an understanding of the long-run issues, and an appropriate balance achieved. Perhaps too much (short-run) rationality can be harmful (in the long-run). And not only in economies.