Many individuals have seen economics as one of the most promising and successful social sciences for quite a long time. It is obviously viewed that people are not only driven by wealth, but also by the ability to harvest benefit from it. This money attribute has given it the capacity to create a human behavior that is systematic and predictive. Many social scientists have seen this obvious progress divert their interest in the direction of economics. Many, if not all, economists assume that if they will all obey the strategies used in economics, progress in their experiments is assured. These political scientists and sociologists have tried to put forward theories surrounding an idea that fundamentally, all actions are ‘rational’ in character. Hence, individuals calculate the possible benefit costs of any action before settling on what to do. This theoretical approach is referred to as a rational choice theory, and it takes the form of exchange theory in the fields of social interaction.
As far as ethics is concerned, decisions should be based on a consistent rationale behind it. Otherwise, it would be disregarded as an unethical decision. Ethics is, therefore, a rational choice. Rationality is useful since it provides an objective and a guide for making critical decisions both in the business environment and in everyday life. However, it cannot be denied that this theory has encountered certain degrees of crisis and breakdown in as much as economic science, mainly institutional, social, and related economics is concerned. In addition, the principles guiding the rational choice theory, and the way they have been developed faces many drawbacks in their applications in the sociology of ethnic relations. Consequently, it is argued that the rational choice theory has not been in a better position to explain the complexity in the ethnic phenomena.
The pioneering figure behind the establishment of the rational choice theory was George Homans. Homans set out a framework of exchange theory, which he simplified into assumptions borrowed from behaviorist psychology. Although Homans’s psychological assumptions have encountered many rejections from countless subsequent writers, his formulation of the exchange theory is still held in the later discussions. The theorists supporting the rational choice theory have become more mathematical in their orientation, and they converge more closely with the current issues in economics. In fact, some economists have attempted to colonize the fields occupied by some other social scientists. In particular, one of the most striking trends of the recent is the work of Marxists, who view rational choice theory as one of the bases of exploitation and a Marxist theory of class.
Many sociologists recognize the fact that individuals are rational actors. However, alongside rational actions, they have also seen people involving in non-rational elements. Such actions recognize the habitual actions, traditional, effectual actions, or emotional and other forms of value-oriented actions. For instance, Max Weber managed to build an influential action of typology revolving around such concepts. The philosopher’s ideas were then taken by Talcott Parsons and infused in the sociological mainstream. What makes rational choice theory stand out among other forms of theories is its denial of the existence of other kinds of actions apart from being calculative or purely rational. It is argued that all social actions can be viewed as rationally motivated, even though they may appear non-rational or irrational.
Rational choice theory leans on the basic assumption that a widespread social phenomenon is expressed concerning elementary actions of an individual of which they are a part. This methodological individualism holds that an individual’s action is the elementary unit of a social life. Explaining social change and social institutions is to be able to expatiate how interactions and actions of individuals produce them. Moreover, rational choice theorists hold that the general principles of economics, which is concerned with how production, distribution, and consumption of goods and services can be applied in understanding interactions in which interactions such as information, time, prestige, and approval are involved. In this theory, people are viewed to be motivated by the goals and wants that express their personal preferences. Consequently, they act within their constraints and based on their knowledge about the situations under which they act. Rational choice theories hold that people have to anticipate the consequences of alternative actions and pre-calculate the one that is best for them. Therefore, as rational individuals, they have to choose the alternative that offers the greatest satisfaction.
When it was first put forward, this theory had a positive impact. Ethnic conflicts and ethnic hostilities were unobserved until recently when they were regarded as irrational, atavistic and primordial behavior, holding into account the strong ethnic attachment feelings. The best contribution of this theory is its demystification of irrationality. The rational choices have been elaborated, and phenomena such as nationalism, ethnic hatred, and racism have manifested themselves based on rational motives. This situation has resulted in conflicts of interests among the many individuals, some of which are intentionally driven.
The primary indicator of this theory’s breakdown in the modern economics is its modification beyond recognition or the end homo economicus, which is from orthodox economics calling for a perfect rationalism. It is considered egoistic, materialistic, profit-maximizing and calculating. With retrospect to radical transformation, it is surprisingly not expected, or a random accident. Part of its adverse effects is anticipated in some areas of conventional economics. Consequently, with minimal and fading exceptions, most modern economics transcend and move far beyond orthodox notion. They proceed to substitute it with an even more complex agent of economics, which is almost imperfect and invariable rationale. For instance, some economists substitute homo economicus with constrained and socially bounded agent, emotional human actor, or an even a more realistic agent.
Although this theory is presented successfully as the alternative explanatory to post-essentialist criticism of other related social sciences, its epistemological and sociological value is limited. The assertion mentioned above is because the primary postulates of the rational theory are explanatory and tautological deficient for a proper analysis of sociology. It is unable to provide a full explanation of ethnic relations. Secondly, decision-making based on the rational choice theory also poses the problem of obligations and norms. Often, individuals making decisions based on rational choice theory do not see the essence of abiding by the norms that do not necessarily lead to their self-interest or as to why they should act in altruistic ways. Rational choice theorists applauses that, norms are a preference, which is just but arbitrary. In respect to this, individuals are not interested in engaging in all manner of value commitments and act rationally. They further postulate that having a sense of satisfaction to help others is rational as well.
Additionally, it has caught many people’s attention that for mutual advantage, there is the need for cooperation. Besides, the claim is grounded in the existing logical views irrespective of whether it produces a maximum outcome or not for any participant. Hence, people prefer cooperation to pure self-interest. Similarly, rational choice theory has failed to explain why altruistic behavior and cooperation is usually perceived to be a matter of normative. Some rational economic actions emerge within the norms of a framework of an institution whose explanations cannot be offered as the result of the rational action. Therefore, the assumption of rationality as an instrument cannot fully explain the social order.
Finally, the methodological individualism held by the rational choice theorists has not been in a position to deal with the problem of social structure. The concept adopted by the theorists in support of this theory is that it is possible to reduce statements surrounding social phenomena to an individual action’s statements. Apparently, explaining social facts concerning other social facts provides a summary of the individual-level procedures that give rise to them. According to Homans, there are no autonomous and independent social structures, and the complexity of organizational level is a reflection of greater usage of generalized reinforces as well as social approval.
Conventionally, the features of social life regarded as social structures are for the rational choice theorists or are interconnected chains of an individual’s actions. A number of these chains are quite extensive and provide a separate life on its own to the social life. It is also imperative to note that, rational choice theorists deny any constraining or autonomy power in the social structures. However, the claims in rational choice theory are not inherent, but in methodological individualism in which most of its advocates adopt a philosophical underpinning. In this regard, rational choice theory encounters similar difficulties with some other theories in the social field that focus on action excluding social structure.
In sum, the rational choice theory holds a methodological individualist position in an attempt to define the social phenomena in the perspectives of rational calculations undertaken by self-interested individuals. It perceives social interaction as an exchange in the social system modeled on economic actions. Accordingly, individuals are motivated by the rewards that accrue from their choices. However, the rational choice theory faces many problems, which should not go without critical observations. The problem relates to collective actions in which the theory fails to explain why individuals join groups and associations. The problem of social norms, under which the theory is not in a position to, explains the emergence of social norms especially, trust, reciprocity, and altruism. The problem of social structure also poses a difficulty in the rational choice theory. Concisely it is not in doubt that an individual making decisions based on the rational choice theory is wrongheaded as the theory is too good to assume that one is always right.
Hodgson, Geoffrey M. “On the Limits of Rational Choice Theory.” Economic Thought 1, no. 1932 (2012): 94–108. doi:10.1177/1043463193005001004.
Manzo, Gianluca. “Is Rational Choice Theory Still a Rational Choice of Theory? A Response to Opp.” Social Science Information 52, no. 3 (2013): 361–82. doi:10.1177/0539018413488477.
Scott, John. “Rational Choice Theory.” In Understanding Contemporary Society: Theories of The Present, 50:671–85, 2000. doi:10.4135/9781446218310.