Sen: Rational Fools

Sen, Amartaya K. (1977). Rational Fools: A Critique of the Behavioral Foundations of Economic Theory (Vol. 6, 317-344): JSTOR.

This essay explores some of the problems associated with the assumption that all actors are rational individuals. These assumptions have formed the core of neoclassical economic theory. Additionally, they are improbably linked to the idea that markets are equilibrium seeking units. When behavior is tied to equilibrium seeking effects, it is said to represent the core of the economy, which is defined as activities that are Pareto superior. Sen points out that these “core” activities have little to do with social welfare.

The article proceeds to highlight all of the reasons for that assumptions of rationality are lacking. It is a very strong critique of neoclassical rationality. However, the purpose of my reading of the article was to examine how it may or may not relate to economics and equilibrium.

“The purely economic man is indeed close to being a social moron” (336).