The Meaning Of \"Rational\"

Like many commenters, I contend that neither my anti-free trade friend and the goecentric ancient Greeks were "irrational". Both made conclusions about how things work based on their available knowledge. Upon seeing people lose jobs as a result of trade, my friend believes it's only a matter of time before America becomes a wasteland of the unemployed. The possibility that displaced workers could get other jobs, even better paying ones, that trade has been happening between people of different countries for thousands of years, and that free trade is a form of specialization has simply never entered his mind. Ricardo's Law of Association is unknown to him. He wants Americans to stay employed - and whatever one's opinion of that value might be - his views on free trade are entirely rational. What he lacks is knowledge, not rationality. Similarly, the Greeks, based on their observations made with the crude technology available to them, made an entirely reasonable cosmological model. Again, they lacked knowledge, not rationality.

The following passage was quoted by my co-blogger Brian and was the first line was called a "classic Mises howler" by Matt McIntosh.

Human action is necessarily always rational. The term “rational action” is therefore pleonastic and must be rejected as such. When applied to the ultimate ends of action, the terms rational and irrational are inappropriate and meaningless. The ultimate end of action is always the satisfaction of some desires of the acting man. Since nobody is in a position to substitute his own value judgments for those of the acting individual, it is vain to pass judgment on other people’s aims and volitions. No man is qualified to declare what would make another man happier or less discontented. The critic either tells us what he believes he would aim at if he were in the place of his fellow; or, in dictatorial arrogance blithely disposing of his fellow’s will and aspirations, declares what condition of this other man would better suit himself, the critic.

[…]

When applied to the means chosen for the attainment of ends, the terms rational and irrational imply a judgment about the expediency and adequacy of the procedure employed. The critic approves or disapproves of the method from the point of view of whether or not it is best suited to attain the end in question. It is a fact that human reason is not infallible and that man very often errs in selecting and applying means. An action unsuited to the end sought falls short of expectation. It is contrary to purpose, but it is rational, i.e., the outcome of a reasonable–although faulty–deliberation and an attempt–although an ineffectual attempt–to attain a definite goal. The doctors who a hundred years ago employed certain methods for the treatment of cancer which our contemporary doctors reject were–from the point of view of present-day pathology–badly instructed and therefore inefficient. But they did not act irrationally; they did their best. It is probable that in a hundred years more doctors will have more efficient methods at hand for the treatment of this disease. They will be more efficient but not more rational than our physicians.

This is one of the least understood passages from Human Action. I know people who have read it and unfortunately gave up on Mises right then and there. As usual, most of the disagreement stems from semantic misunderstanding more than anything else. Mises is merely saying that people act to achieve their goals in the manner they see fit based on their understanding of the situation. Just like my protectionist friend, the ancient Greeks, and bloodletting doctors.

Labeling something "irrational" involves a 2nd-party assessment of the means chosen to achieve particular ends. It's a word that gets thrown around a lot and has a different intended meanings depending on the user - ignorant, inefficient, or merely dumb.

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