Abstract
It was argued in the introduction that since poverty is a multidimensional phenomenon and the interactions between the different dimensions can take different forms, the study of poverty along separate disciplines is inadequate. Because of the complexity of the interaction among the different aspects of poverty, the concept should be embodied in a model of man and his behaviour.
‘Know thyself.’—Socrates
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Notes and References
Even the definition of rationality changes with the discipline. For discussion on this issue see March and Simon (1958).
The Wurzburg School refers to a group of German—Austrian psychologists (Ach, Kulpe, Watt, and Buhler) who were the first to study thinking under experimental conditions at the beginning of the century.
It was also the basis for more research in the area of particular field study oriented research.
This is not necessarily relevant in a closed ongoing interaction among variables over time.
Time in the scheme is treated only in a static notion and not in a broader dynamic view.
Lazarsfeld (1954) argues that ‘economics is not concerned with how people behave but how to draw up an action scheme from which the idea of marginal utility and other economic concepts can be derived’. Ramond, in 1962, went even further in suggesting that economics, as well as game theory, statistical decision theory, and the like, do not offer theories of human choice. These kinds of ideas are shared by some economists. Boulding (1966, p. 82) argues that economics ‘is the behaviour of commodities, and not the behaviour of men’. Other economists even assert that the economic theory is largely devoid of empirical content (for example Papandreou, 1958). On the other hand, economists like Friedman (1953) reject as meaningless the debate about whether the assumptions of the economic theory are descriptively realistic. Finally, other economists contend that economics cannot be limited to the study of commodities alone, since goods and services acquire meaning only in a social context which implies that economic relations are ultimately relations among human factors (Seligman, 1962, p. 786).
The notion of individual preferences has been spelled out in terms of six main assumptions (see for example, Nicosia, 1966): (i) Independence — An individual’s preferences are independent of his environment at the moment of choice, i.e. there are no external effects from other individuals. Even though this idea was challenged (for example by Katz and Lazarsfeld, 1955) it is unlikely in this scheme to conceptualize preference dependence, since the set of preferences ignores the formation and change of human perceptions and values (for exceptions, see Sen, 1973). (ii) Nonsatiability — The individual is never satisfied. This assumption denies any physiological and social psychological constraints on the individual’s capacity to enjoy increasing types and quantities of goods. (iii) Order — This axiom assumes that an individual knows whether he prefers a to b or else he is indifferent. It ignores the mental conflicts and the search process through which the individual orders his preferences. (iv) Consistency — If an individual at one point in time prefers a to b and b to c, then he will prefer a to c. This implies that the individual always knows his preferences and is never confused (always consistent) in choosing between several alternatives. Furthermore, the decision process involves time in which the individual and the environment change, and so may the individual’s preferences, but this is also ignored by the above assumption. The consistency and ordering assumptions define the notion of rational decision in economics. Non-rational decisions are those when these assumptions do not hold (intransitive ordering). (v) Complete and convex are two mathematical requirements with behavioural implications. The first ensures the uniqueness of a solution from a mathematical point of view, and from a behaviour point of view it extends axioms (II), (III) and (IV) for any number of ‘goods’ involved. The second expresses mathematically the behavioural case of diminishing marginal rates of substitution. (vi) Irrelevance of alternatives — This assumption narrows all the possible alternatives into a relevant set.
Implicitly it is assumed that the initial endowment is sufficient for subsistence.
This was challenged by March and Simon (1958). They argue that because of limited information and limited problem solving capability, a much more realistic assumption is that the individual’s desire is to reach a certain minimum of satisfaction only.
A partial feedback mechanism was introduced in the 1959 Lazarsfeld scheme.
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© 1986 Efraim Gutkind
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Gutkind, E. (1986). Systems of Human Behaviour. In: Patterns of Economic Behaviour Among the American Poor. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-08206-3_2
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DOI: https://doi.org/10.1007/978-1-349-08206-3_2
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