Rational choice as a straw man

Recently at a sustainability forum at an un-named university, a historian decided to try to make me into a whipping boy for economics.

The snotty historian was one of those hippie throwback types who came to professional gathering in dirty clothes and spent her time during her presentation reading to us from her blog. There’s something that nobody but an accomplished historian could do.

At one point in the day, we were discussing the problem with defining environments as commons, and I noted that Elinor Ostrom had just received a Nobel in acknowledgement for her work on how collectives can and do successfully manage commons. Snotty historian sneered “It always amazes that in economics you win prizes for pointing out that people aren’t rational.”

How do you respond to such cattiness?

Well, first, I don’t feel like I need to defend economics per se. Criticisms from a washed up historian at a backwater university are like throwing spitballs at a tank in terms of the influence that economics has over policy and the social sciences.

On the other hand, I have trouble with the “people are irrational frame,” too, or “people aren’t rational” positions. I find that these type of people, again, want to use this as an excuse for NEVER having a formal model or theory for the descriptive work that follows. A bit like reading to us from your blog and trying to say that’s research.

Andrew Gelman has a post up that captures my feelings exactly. Here’s the money quote:

People have many overlapping reasons for anything they do. For a behavior to be “rational” does not mean that a person does it as the result of a reasoned argument but rather that some aspects of that behavior could be modeled as such. This comes up in section 5.2 of my article with Edlin and Kaplan: To model a behavior as rational does not compete with more traditional psychological explanations; it reinforces them.

I think that people do the best they can–they optimize–based on their constraints, information, concerns (family, friends), and needs. Why is that so controversial?