The Rational Choice Generalization of Neoclassical Economics Reconsidered: Any Theoretical Legitimation for Economic Imperialism?

Abstract

The article reconsiders the generalization of neoclassical economics by modern rational choice theory. Hence, it reexamines the possible theoretical grounds or lack thereof within neoclassical economics for economic imperialism implied in much of rational choice theory. Some indicative instances of rational choice theory's generalization of neoclassical economics are reviewed. The main portion of the article addresses the question as to whether neoclassical economics allows its generalization in rational choice theory and thus legitimizes economic imperialism. Presented are a number of pertinent theoretical reasons why neoclassical economics does not fully justify its generalization into rational choice as a general social theory, particularly into an overarching economic approach to social action and society. Also discussed are some theoretical implications of the rational choice generalization of neoclassical economics. The main contribution of the article is to detect lack of a strong theoretical rationale in much of neoclassical economics for rational choice theory's manifest or latent economic imperialism.This article reconsiders the current uses of classical and neoclassical traditions in economics to legitimize a certain approach, such as rational choice, in contemporary sociological theory and elsewhere~political science, for example!. With the rise of sociological rational choice theory~Hechter and Kanazawa 1997; Kiser and Hechter 1998!, or rational action theory for sociology~Goldthorpe 1998!, as one of the "most influential theoretical developments of our time"~Somers 1998!, many of its advocates believe that they make a "rational choice of theory"~Abell 1992! by adopting and applying with slight modifications the basic notions of the economic approach to human behavior~Becker 1976!, as putatively rooted in neo-classical economics. Such notions include atomistic individuals free from complex interdependencies, the pursuit of pure self-interest~construed as happiness!, farsighted rationality and accurate cost-benefit calculation, market equilibrium and/or~the Pareto! optimum, parametric individual preferences/values, technologies, social institutions and cultures, consistent maximization of profit~producers! and utility~con-sumers!, free and perfect competition, a laissez-faire government, full knowledge and complete information, etc.Arguably, the outcome has been sociological rational choice theory's generalization of neoclassical economics 1~R ambo 1999! beyond the original realm of the market into nonmarket domains. This represents a generalization and extension of the basic assumptions and concepts of neoclassical economics from the economy to society. Specifically, such

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