Saturday, December 11, 2021

 532. Rationality and emotions

 Here I continue a series of 14 dilemmas. This is the seventh.

 Feelings do not necessarily generate actions, emotions do, as the etymology of the word says: they e-move, move one outwards. Here I concentrate on what moves action: rational reasons, intuitions, heuristics, habits and emotions. Rational reasons are conscious and deliberate, emotions are conscious but automatic, not deliberate. The West has been imprinted by the Enlightenment, which has celebrated rationality, and thereby has produced a wealth of progress in science, technology and prosperity, but reason has galloped beyond itself, neglecting body, emotions and feelings.

 A dominant metaphor,  going back to Plato has been that of seeing. The original meaning of the ancient Greek word ‘theory’ was seeing. One sees truth in one’s mind, in the form of clear and distinct ideas (Descartes). And indeed, when one sees a cat on the mat, one cannot doubt that one sees a cat. In the postmodern literature the metaphor of seeing is seen as objectifying people, forcing them into a pre-established frame, robbing them of their particularity and denying their inscrutability and irreducibility (Levin 1999). However, I do not think this is necessarily the case. Everyone has experiences with telling reciprocal glances that give resonance and show empathy. Not looking at someone while talking to him/her is alienating. But one cannot look in all directions at the same time, and hence looking is constraining. Looking is also incomplete, complemented by hearing and touch.

 How do we reason? Apart from ‘seeing’, is reason calculative? According to utilitarianism, which currently is the dominant ethical stance, we are moved by pleasure and pain, and rationality entails that we aim for maximum utility, minimum pain and maximum pleasure. For early utilitarians, such as Jeremy Bentham and Adam Smith, the aim was the greatest utility for the greatest number of people. The ideal was to attach a number to utility, called cardinal utility that could be maximised. That is problematic. How can you put a number to the totality of different pleasures, such as attending a soccer match, enjoying a pizza and the smile of your daughter? J.S. Mill recognised that not all pleasures are commensurable, cannot all be added up in a single measure of utility. He distinguished between ‘higher’ pleasures of the mind and spirit, and ‘lower’ pleasures of body and matter. The economist Pigou later adopted the idea of higher and lower pleasures (Berry 2017). Later, the notion arose of a hierarchy of needs in Maslow’s pyramid, with at the bottom physiological, bodily needs of food, sex and defense, next, on a higher level, needs of shelter and safety, then social needs of recognition and belonging, and at the top of the pyramid spiritual needs of self-realisation. The order is not universal; sometimes prestige supercedes survival. It is even more difficult to aggregate the pleasures across people. In economics, based on utilitarianism, the aim of people shrivelled to the greatest utility for the self-interested individual

 Later, economics replaced cardinal utility by preferences, called ordinal utility. No number was attached to utility, but a person can decide which he prefers in a number of options, regardless of how strong that preference is. Preference had to satisfy certain axioms, such as transitivity: if you prefer A over B, and B over C, then rationally you must prefer A over C. The problem to aggregate across individuals remains. Economists assume preferences to be given, prior to choice, but in fact they develop with action. Choice may precede preference: You may have to try something before you know if you prefer it. Furthermore, preferences depend on means to realise them. It is hardly rational to consider options for preference that one cannot realise for lack of means. Preferences are affected by learning, and moral considerations, and therefore by place of birth and culture. They may be formed by mistaken or ill-informed ideas, affected by false news and rhetoric, misdirecting preferences from what one ‘really wants’.

 I give an example concerning shops, say supermarkets (Nooteboom 1984). Shops have several dimensions of utility: price, proximity, and range of goods offered (called ‘assortment’, in width of types of foods offered, and depth of brands and prices per type of good). Let price be indicated by 1, range of goods by 2, and proximity by 3. Cheaper shops tend to be farther away, larger than the neighbourhood shop, but to offer a greater range of goods. Let preference be indicated by the symbol >. Let the decision rule for choice be that you choose the shop that is preferred in most dimensions. Now let there be three shops you can choose from: A, B and C, and:

1.      You prefer A over B, because a1>b1, and a2>b2 (A is a hyperstore, with a wide assortment of food and non-food, and is cheap), but is further away: a3<b3.You prefer B over C, because it is more proximate, b3>c3, and cheaper, b2>c2, though it has a narrower range of goods, b1<c1.  You prefer C over A, because although it is more expensive, a2>c2, it is more proximate, c3>a3, and has a deeper assortment of goods, c1>a1, (it is a neighbourhood delicatessen). The result violates the axiom of transitivity: A>B, B>C and C>A. This is supposed to be irrational, but the story of the shops is plausible, I propose.

 The illustration is logically the same as Kenneth Arrow’s famous ‘paradox of majority voting’, but that operates on comparison of preferences between people, on inter-personal preferences between choice options. With Arrow, the paradox of intransitivity turns on ‘preference reversals’ concerning the choice of a single thing between people, with X preferring A over B, and Y the reverse.

 Pigou reverted to cardinal utility, and while admitting that economic welfare is not equal to total welfare, and ignoring the problems of aggregating different utilities, especially across individuals, he went ahead and developed the notion of national product, in the drive to measure economic success. National product is misleading, since it incorporates only things included in price. That means that if a man marries his housekeeper, national product goes down. National product excludes so-called ‘external effects’, i.e., things not included in price formation, such as pollution, or, on the positive side, public services such as safety (police, fire-brigade, army), public schools, street lighting, health care, refuse collection, scientific research, roads and bridges, culture and art, and jurisdiction. No small shortcoming. Positive external effects arise when everyone benefits, and people cannot be excluded from the benefit. On toll roads one has to close off exit and entry where there are no pay booths.

 I cannot cease to marvel at the blitheness with which economists create and use ideas that are admittedly untrue. They celebrate rationality, but are themselves irrational in making unrealistic assumptions and then applying them to reality in policy advice. Their argument is that it is still useful and it is better to have something rather than nothing, as a basis for policy.

 Against the reasoning of a subject is the recognition that rather than being an outside subject looking at the world, we form our ideas in interaction with the world. There is ‘framing’, having a mindset by which one interprets a situation, and which harbours a repertoire of actions triggered by that interpretation. It is a form of bias. This is non-rational but may be adaptive in fast response to danger or opportunity.

 David Hume claimed that reason is the ‘slave of the passions’. Emotions set the agenda, and help to step out of routine conduct. The subconsciousness of choice, in routines, is rational, in that if we had to consciously reason about all we do, the scope for rational reflection beyond daily actions would be severely restricted. Now, because we have routines, we can operate daily activities without using our limited capacity for rational attention, and dedicate that capacity to the unfamiliar and unexpected. With that, we can converse and reflect while driving a car. But routines can yield disaster when unusual conditions arise. Routinised driving of a car covers the normal, but when an accident is about to happen, we need the emotion of scare to catapult us out of routine into rational reflection.

 Our choices are ruled by non-reflective and often non-rational ‘decision heuristics’, bypassing rational reflection and calculation. While they are non-rational, they can be adaptive, assisting survival. One is loss aversion: we make greater efforts to avoid the loss of what we have than to acquire things we do not have. This can lead to irrational, fruitless litigation to defend against loss. This is adaptive in that in evolution loss often was loss of life or livelihood. A second heuristic is statistically unwarranted generalisation, raising incidents to the level of law-like regularities. Mishaps or incidental misconduct is seen as ‘always’ happening. This is adaptive in being alert to the possible recurrence of opportunities warranting engagement, and vulnerability to recurrent threat. Another is escalation of commitment, where past losses of a line of action give a motivation to stick to it. This is not rational because bygones are bygones, water under the bridge, and rationally only future costs and benefits matter. Thus, loss of the lives of soldiers prods continuation of the war, because otherwise those losses ‘would be in vain’. It is done in spite of its non-rationality, for reasons of reputation, because withdrawal would signal an admission of having made a bad decision. However, it can also be an indication of perseverance in the face of setbacks. Another is anchoring and adjustment, where people stick to established practices, or allow only for marginal adjustment, even though what is established is arbitrary or counterproductive, requiring a new approach. Yet, this also may be adaptive as perseverance.

 Psychology has shown that intuition often works better than rational calculation. When you buy a house you need to rationally consider things like the state of the roof and of foundations, the drains, electricity wiring, water pipes, conduct of neighbours, proximity of public transport, and so on. But you generally don’t then decide by sitting down to make a list of pro’s and cons, attaching weights, and calculating the balance. You may do that, but generally that does not clinch the issue. You sleep on it and decide on how ‘it feels’. Such decision making often works out well, Apparently, there is some process in the mind that does the balancing, mixing rational considerations, feelings, memories, and emotions. The conscious, rational considerations are not useless, but they feed a wider, subconcious process that we call intuition.

 Reason still is one of the ‘cardinal’ virtues, i.e. about which everything turns, next to the virtues of courage, moderation and justice. Emotion loads empathy and benevolence, needed for the cardinal virtues of moderation and justice.

 Institutions are rules of the game (Hodgson 1998), enabling and constraining action, such as laws and regulations. police, jurisdiction, prisons, etc. They constitute largely rational governance of actions, requiring organisation and control, limiting or promoting negative freedom. Action can also be guided by morality, which is more laden with feelings and emotions, and does not require organisation and control, but arises by assimilation in education, schooling, and experience along the path of life. While institutions mostly affect negative freedom, morality can yield positive freedom, such as justice in access to resources.

 In evolution, humans and other beings have developed mechanisms to maintain equilibrium, homeostasis, against destabilising threats, and to seize opportunities, from the environment, in order to survive. Those take physical forms, of physics and chemistry, but also psychological ones, and there emotions come in, such as anger, fear, disgust, hatred, love. Damasio (2003) proposed that feelings arise as mental representations, literally reflections, somehow, of emotions, yielding conscious thought and reason. Thus, reason builds on emotions and goes beyond them. Emotions are unreflected, non-deliberate part of a psychological mechanism of survival, developed in evolution. Damasio was inspired to this by Spinoza, with his notion of conatus, who recognised the role of emotions in decision making.

 Certainty and uncertainty

 Certainty is scarce, though it does exist. There can be certainty of something when it logically follows from the axioms of an underlying mathematical system that you take for granted, but it is conditional on that. That is called ‘analytic’ truth, by deduction, in contrast with ‘synthetic’, empirical truth.

 Uncertainty can be denied, by religion, with a benevolent God, belief in an afterlife, and may be hidden in ritual. Natural scientists used to search for the certainty of laws of nature. David Hume warned that no matter how long one has observed a regularity, this does not logically imply that it will continue in the future. The regularity of nature is an assumption. One needs a causal account to justify the regularity of any phenomenon. This inspired Kant to the idea that we do not know reality as it is ‘in itself’, but only by the working of mental frames of interpretation. I would give that a little twist in adding that one does not know to what extent ideas form and distort reality. If we do not know reality as it is in itself, how do we know that and in how far do ideas misrepresent it? We can only have confidence in ideas to the extent that they satisfy logic, cohere with other ideas that have withstood the test of time and have survived a variety of criticisms. In (post)modern philosophy, there is no outside subject looking at the world from outside, but the subject I part of reality, emerging in interaction with it.

 An example of mind frames that are ‘triggered’ by circumstance is the following. Show someone a white napkin, a white shirt, a white sheet of paper and ask what cows drink. Often, triggered by the whiteness of things, people say ‘milk’, but the right answer is ‘water’.

 On the other side of the dilemma, the view is that uncertainty is pervasive and inevitable. Physicists have become accustomed to the Heisenberg uncertainty principle, that one cannot with certainty measure both the position and the momentum of an elementary particle such as an electron. An electron circling the nucleus of an atom has a ‘cloud’ of probabilities of location. When colliding with something else, the cloud collapses to a determinate location. Nature was before seen to consist of things existing independently but is now seen as inherently conditional upon interaction with other particles. That yields a process view of things (Nooteboom 2021).

 According to Karl Popper, theories can be falsified but not proven, and logically this is an incontrovertible claim Theory seeks laws that claim universal validity: given conditions A, B. it always occurs. Popper proposed that the ethic of science is to search for falsifications. Others objected that it is not rational for scientists to do this. They have an interest in gaining recognition by theories that are confirmed, giving a rational incentive not to search for falsification, or even hide it when inadvertently found. In a famous debate (Lakatos and Musgrave 1970), Popper admitted this and even pleaded for a certain conservatism of neglecting falsification, not only because such conduct is a fact of life, but also because it is rational in yielding information on the limits, the ‘true strength’ of a theory, and yields hints in what direction to seek renewal, again in tune with Hegel’s principle of learning by failure.

 Economists distinguish between risk and uncertainty. In risk, one does not know what will happen, but one knows what can happen. You can see this as a set of all possible occurrences or outcomes. One can assign probabilities to them and calculate ‘expected value’. If one does not know objective probabilities, the procedure is to assign equal probability to all possibilities, and adapt them as experience accrues concerning their frequency of occurrence. Under uncertainty, by contrast, one does not know all that can happen, but one can imagine possible futures, in narratives about it, called ‘scenarios’. One cannot optimise a policy across all possible but unknown futures, but one can consider the ‘robustness’ of a phenomenon or policy across a few such possible futures, choosing a policy that is not necessarily optimal in any of those futures but yields a satisfactory outcome in all of them.

 Uncertainty is unsettling to many people, who are then tempted to deny the uncertainty of a phenomenon, or even the very existence of uncertainty, and to construe myths that do yield an imagined certainty, in conspiracy theories that yield apparent certainty, often encompassing a multitude of phenomena, for the sake of simplicity, while rejecting criticism, theoretical or empirical, as exemplifying the bias and interest of the conspirators, and thereby confirming rather than falsifying the conspiracy theory.

 Economists seldom take uncertainty seriously, and mostly opt for treating it as risk, because under uncertainty they cannot engage in the calculation of an optimum, which belongs to the core of economics (Hodgson 2019). As a result, they cannot offer an adequate account of innovation or learning, where uncertainty is of the essence. With a treatment in terms of risk, they can manage to reconstruct innovation that is incremental, staying within the basic principles of established practice. In government innovation policy this is favored, because one likes to plan innovation in concert with incumbent business leaders, politically necessary for acceptance, while still waving the fashionable flag of ‘innovation’. For the leaders of large business, with a stake in established practice, incremental innovation is preferable because it does not yield the ‘creative destruction’ of more radical innovation crossing the limits of established practice and the investments ‘sunk’ in it. Radical innovation is erroneously expected to follow from specifying intended outcomes and timetables of achieving them, which is a contradiction in terms. Radical innovation yields unexpected outcomes that are not yet useful now, which are then labelled as ‘failures’, while even in their failure they are useful in showing which avenues do not yield results and indicate new avenues to try. As noted before, according to a Hegelian principle, one gets to learn things in their failure. Furthermore, radical innovations that do yield a useful outcome have a large and wide impact that compensates for the cost of efforts that did not have impact. This yields a criticism by many researchers of policy where fundamental research is challenged to be useful in the short term, while its often large impact emerges in the longer term. This criticism was included in a report to the Dutch government. that was developed under my supervision. It was not appreciated, for threatening to ruin the game of calling incremental improvement innovation.

 An alternative perspective, accepting uncertainty, is that of evolution, which does not presume a rational ‘intelligent design’, but explains development of novelty as the outcome of a process of selection by the environment, in combination with the generation of variety submitted to selection, in nature by chromosome cross-over in sexual reproduction, mutation of genes and variations in the interactions of genes and their ‘expression’ under influence of their environment. In heterodox, evolutionary economics, variety is created by invention and innovation, by entrepreneurs, and selection is done by the market and institutions.

 In science, research proposals and papers are regularly rejected by scientific journals because they do not fit in the core of the research programme adhered to by the editors and reviewers of the journal. This is an example of selection, in an evolutionary theory of science. However, scientists held back by this selection frequently create their own proprietary journal, thus creating their own selection environment. This also happens to some extent in nature, when organisms defend themselves against selection, or create a benevolent selection environment, with beavers building dams, rabbits digging warrens, or species engaging in symbiosis with others or being parasites. This matching of selection environments with life forms to be selected, is called ‘co-evolution’ When this prevents a stable selection environment, evolution breaks down. For libertarians who disregard market imperfections, this yields an argument not to interfere with the selection mechanism of the market.

 An example is the present breakdown of selection of opinions by arguments of truth, logic and facts, since truth has been made irrelevant by demagogues. and some governments, in the dissemination of ‘fake news’. Opinions are now presented as certain, incontrovertible, by the loudest and most charismatic mouths

 I propose to follow Dewey’s notion of truth as ‘warranted assertability’, with warrants of logic, facts and practical workability. Now, warrants of logic and facts are often ignored, and are replaced by emotion-laden appeals ‘Is’ is replaced by ‘ought’. I allow for emotions, value them, but this killing of rationality spells disaster.

 Science is held to yield the progress of truth, but has a considerably conservative practice. As discussed before, according to Imre Lakatos (1978) science takes the form of ‘research programmes’, collections of theories that have a shared ‘hard core’ of basic assumptions and methodological principles, and a surrounding ’protective belt’ of subsidiary assumptions. When a theory in the programme is falsified, the core is left unaffected, and adjustments are made in the protective belt. The economist’s drive for calculation of an optimum belongs to the core of the discipline of economics. When a theory is falsified, the principle of maximisation is not challenged, but the function to be maximised is tinkered with. I once received the following rejection of a paper submitted to an economic journal: ‘this is not optimisation of an objective function, therefore it is not science’.


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