HANS ALBERT ON RATIONAL CHOICE THEORY

[Editor's Note: The following is a translation of a conversation between Prof. Hans Albert (Mannheim) and Newsletter Editor, Fred Eidlin. We would like to encourage our readers to submit transcripts of interviews or discussions as well as excerpts from written correspondence that might be of interest to the Newsletter readership, provided of course all parties have given their agreement.]

There are really very different kinds of people working in the Rational Choice paradigm.

For example, [Siegwart] Lindenberg has learned modern political economy. In any case, he uses that kind of procedure in an interesting way. He is working on a book explaining revolution. He doesn't always stress general laws and wants to make a linkage to experiments and social research. He is very balanced in this respect. He wants to use psychological research only in order to improve the behavioral assumptions of the economic approach. He also shows why, to some extent, these assumptions have to be simplifications. He thinks there has to be an interplay.

I think so too. You can't just ask the psychologists what the laws of behavior are. They will look at you astonished. Maybe not the learning theorists. They have laws of learning. All the others say "No." We investigate personality profiles and this and that, and everything imaginable. We can't find the laws we would need in the social sciences anywhere - the behavioral assumptions. You have to search the social science tradition and improve them. You can use insights from other disciplines for purposes of criticism and improvement, but you can't just say "Here are the assumptions about behavior. The psychologists have found them. Now apply them." It won't work.

Psychology has its own problems. They are often different from those we have in the social sciences. They can make sense, but this doesn't mean you can simply take over a problem solution from psychology, since the problem formulation was different, even if it made a lot of sense. They want to know the circumstances under which people go crazy. Some things you can take over. You have to look at it closely.

The achievement-motivation people are very interesting for the social sciences. Why? If, for example, you read Schumpeter's theory of economic development. It has an entrepreneurial model - how entrepreneurs search for new Produktionskombinationen, and to explain the development. And the comments that Schumpeter makes about entrepreneurial behavior - e.g. entrepreneurs don't necessarily have a profit motive. The entrepreneurs regard profit as a kind of achievement standard by which they measure their success. Profit itself is often not so interesting for them, it's just a success-standard. The market gives them a standard. So it isn't self-evident that someone who strives for profit has a profit motive. He can have very different motives, but this is the standard of success that he accepts. And the achievement-motivation people have developed a research program, where they show that achievement-motivated people strive for distinction, i.e. they strive for problem-solutions that contain some kind of excellence. What really matters to them is to achieve results. The standard can be very different. They choose their tasks accordingly. E.g. this has been tested on achievement-motivated children. They always choose tasks of medium risk. When you win on low-risk tasks, you can't be proud of it. Tasks with very high risk are crazy. With tasks of medium risk you can act strategically and succeed on the basis of your own capabilities. That is why they choose such tasks. And they have read Schumpeter - these people. The author of The Achieving Society, McClelland read Schumpeter. He was inspired by what Schumpeter said about entrepreneurs. And this is most interesting. The entrepreneurs are often too optimistic in their expectations, and it is only because of this that they can become active. If they were to calculate correctly, they wouldn't take risks. Such things are in it. The Max Weber thing - how achievement motivation arises is explained. Weber said the spirit of capitalism is as important as the other conditions. How did the spirit of capitalism arise? Through an ascetic Protestantism. The entrepreneurs didn't strive for profit for reasons of money, rather they wanted to be sure that they would be saved. You could only do this through success in the present. Now these people say that conversion to such a Weltanschauung is only one of the possibilities of creating achievement motivation. But it doesn't always have to be Christianity. In Japan it was by the ethics of the lower Samurai class. It doesn't always have to be conversion to a Weltanschauung. How does this come to pass. If you take a closer look, it is the educational practices of Puritanism. They placed great value on self-reliance. If you make use of these educational practices, even independently of religion, you can also create achievement motivation. This means that they produced a generalized theory of achievement motivation of which the theory about the influence of Protestant ethics on motivation is a special case. As a result, they had a more general theory which can be used to explain economic development where there is no Protestantism, since there is a completely different culture.

If you read Robert N. Bella Tokugawa Religion you see that the Samurai class played the same role as the entrepreneurs in England. They have a completely different religion, but they stressed similar values. There you have a more general theory of behavior. Perhaps it isn't yet universal, but this is a development which can also be interesting. And this is part of psychology which can be interesting here. But not all kinds of psychology. Only those that focus on problems that play a role here, e.g. on the problem-solving behavior of the entrepreneurial personality. If you take normal economics, something like this doesn't arise at all with the utility function.

Economics has often failed in developing countries. Why? Because there are completely different institutions, different personality types, and the assumptions that are usually made don't work at all. If, instead of these universal utility functions, you have theories of motivation in which such things occur, under what conditions, with what educational measures achievement motivation arises, it might be otherwise. McClelland went to developing countries and did training in achievement motivation, with modern methods. I think he was successful. Then he said, good, let's see, achievement motivation is not the only thing. There is also power motivation, affiliation motivation. Motivation is always mixed. There is a combination of achievement and power motivation with American entrepreneurs, or something like that. Maybe there is a bias in it. Nevertheless, despite this, he tried to develop a theory of motivation, that is applied to interesting situations in social science and makes explanation possible. He somewhat neglected the social-structural aspects of the situation, as his critics (for example Eisenstadt) have observed. But someone else can bring them in. Psychologists never have much understanding for structures.

One problem is: How do achievement-motivated people get into the situations in which they can become entrepreneurs? This isn't self-evident. It is the problem of the recruitment of entrepreneurs. There might be social barriers there. There are many achievement-motivated boys who will never be entrepreneurs if there are social barriers in place. This is the question of social mobility. And the question of social mobility is partly a question of structures. In a caste society like India, the talented and achievement-motivated can't rise because there are social barriers. So, on the one hand there is education for achievement motivation; on the other hand, there is social mobility and recruitment to roles. There is a social-structural component and a motivational one. You can imagine what a meaningful kind of research this is. By the way, I wrote a paper, "Erwerbsprinzip und Sozialstruktur" where I criticized economics because it doesn't do things like this.

(FE) Have you sent AB (a rational choice theorist) these papers?

(HA) I send him my papers. He probably hasn't read them. Those people always cite Americans. They don't read me. They are very friendly to me, but they don't read me.

(FE) But he regards you as a great expert.

(HA) Maybe, but why should he read it? He has so much to read. I don't know and it's all the same to me. I have also brought people together from the most diverse areas in order to apply this. But this is also practically a sketch.

(FE) I think you are too optimistic. The social sciences consist almost entirely of research programs, and people talk past each other.

(HA) Yes, of course. I'm not optimistic at all. Most of what is done in social science is junk.

Most people read only literature from their own orientation. There is so much literature for every orientation that you can't even keep up with the literature from your own orientation. They hardly read the others.

(FE) But even when they read them, they have an ideology through which they interpret the others. For example, there are two quantitative orientations in American political science. When you look at their articles, e.g. in The American Political Science Review, they look identical. Both use mathematical formulae and lots of mathematics. There are first the Michigan survey research people.

(HA) Oh yes, survey, Ann Arbor. That's where our people go. That's where they learn everything.

(FE) These are the empiricists. They gather data.

(HA) Yes, that's right. Our people are always sent to Michigan to learn their methods.

(FE) The other school is Rochester. Riker and ...

(HA) Oh, he's in Rochester. They must be theorists. Rochester, Karl Brunner also comes from there, the economist.

(FE) I've talked with people from both schools, and what I find really interesting is that both sides, both schools have, first of all, rationalizations for their own weaknesses.

(HA) That's normal.

(FE) But they have a whole system of rationalizations that explain why they accept such weak assumptions, and so on, but they attack the other side for their weak assumptions. And they have contempt for each other.

(HA) It's like that here too. The systems people don't bother with the others, have contempt for the empiricists; the empiricists have contempt for the systems people, and ...

(FE) Like you, I would like to learn from all of them, but I am trying to understand and solve the intellectual problems that have to be solved if you want to bring them together.

(HA) That has always been my problem in economics. I wrote a Habilitation thesis dissertation - Nationalökonomie als Soziologie (Political Economy as Sociology). I wrote in it that the Neo-classicists have no social structures. You have to bring in this whole problem of institutions, and so on, otherwise you can't give reasonable explanations. It was shot down by the sociologists as well as the economists.

(FE) These paradigms are ideologies - just like political ideologies.

(HA) But you know, there is a small current, for example, Coleman belongs to it, which attempts to bring social structures into economics. Now and then there is a little article in The American Economic Review or somewhere else. All over the place. These articles are all very interesting. But this is never the dominant tendency. The dominant tendency are Arrow-DeBreu, post-Keynesianism. Coleman was a sociologist who learned economics, who is now tying them together. This is very rare. They are always short articles. You have to look for them with a magnifying glass.