Rational actor, muddled actor

The notion in economics that humans are “rational actors” has been widely, and rightly in my opinion, criticized. Here is the basic argument against “rational choice theory” in economics as put by Edward J. Nell and Karim Errouaki:

To make rational calculations projectible, the agents may be assumed to have idealized abilities, especially foresight; but then the Inductive Problem is out of reach because the agents of the world do not resemble those of the model. The agents of the model can be abstract, but they cannot be endowed with powers actual agents could not have. This also undermines Methodological Individualism; if behaviour cannot be reliably predicted on the basis of the ‘rational choices of agents’ a social order cannot reliably follow from the choices of agents. (Source)

The problem is even worse when it comes to linguistics. All people much of the time are neither rational speakers nor rational listeners.

Speech arises out of complex mental, emotional, and environmental conditions. As speakers, we are often not aware of many of those conditions. The same is true for listeners. When the muddled aspects of speaking and listening are added together, it’s a wonder anyone ever understands anything.

The even deeper problem is most muddled speech and listening never gets figured out. In place of mutual understanding, we normally have to go with muddled interpretations of what people are saying and how they understand what we have said.

Don’t believe me? Watch carefully what you say and how you are being understood. Listen carefully to others and notice how you are understanding what they are saying. It’s a very messy process.

If basing a model of economics on “rational actors” does not work, the situation is far worse for psychology, anthropology, sociology, linguistics, history, and more. The problem is worse because economic behavior is simpler than linguistic behavior, which underlies all of these subjects.

A good model of sociology might say something like this: People are emotionally and mentally muddled and they communicate very badly with each other except in simple situations or on the basis of simple semiotic models they already agree on. Culture, therefore, is little more than the simple semiotic models people use to communicate because they don’t know how to communicate in any other way.

A model for psychology might say something like this: Most people have profound emotional problems because they cannot communicate with others except in simple situations or on the basis of simple semiotic models they already agree on. This is a disaster in intimate interpersonal relationships, often leading to anger, sadness, alienation, and depression.

A model for history might say: The above two paragraphs describe major historical forces that are as significant as economic and environmental forces.

We won’t fix the world just yet or change the course of history, but as individuals we can do something about this with our best friends and life partners. FIML corrects these problems because FIML exposes communication errors and corrects them while they are happening. If communication errors are not caught while they are happening (at least a good deal of the time), partners will be forced to rely on simple semiotics, simple extrinsic cultural norms, to conduct their emotional lives together, and that is a recipe for disaster.

People are muddled actors when it comes to communication and this is a serious problem when it comes to intimate interpersonal communication. But we can become much more rational and communicate much more clearly with at least one other person by using FIML techniques.

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