Rational Expectation Theory and Ideological Factor of National Security

Conclusion

Although empirical rational expectations theories make no ideological claims, they can have ideological relevance. The rational behavior they attribute to humans may lead to ideological expectations. If so, rational expectations theory suggests that we not only have a “reason” to be ideological -it is rational to be so-but that we will in fact be ideological much of the time.

Some rational expectations theories equate “rational” with “self-interested” and assert that people invariably act out of self-interest. If self-interested action contributes to the general welfare, then presumably one can be ideological simply by yielding to one’s inclination to act out of self-interest, although this popular view is difficult to defend empirically. Recent refinements of Hobbesian social contract arguments take a revisionist approach, suggesting that it may be in one’s self-interest to negotiate agreements that are fair in some sense, and to adopt a disposition to comply with them. The agreements themselves may resemble a Raiffa-Kalai-Smorodinsky (RKS) bargaining solution.

If rational expectations are not assumed to be self-interested, they may nonetheless be ideological simply by virtue of their formal properties. The logical implications of rational expectations have been extensively explored in rational expectations theory, with some interesting conclusions. If people aggregate their preferences in a manner that satisfies certain axioms, then the resulting social policy will, for example, be utilitarian or Rawlsian, depending on the degree to which it is meaningful to compare utilities across persons. The interpersonal comparability assumptions, however, are quite strong because they actually limit the degree of comparabilit...

... middle of paper ...

...f antiquity and the rationalistic theories of enlightenment thinkers, but in the Christian and Islamic traditions as well. Even in the business world, some wise managers have discovered that convincing workers of the company’s positive contribution to society motivates them as strongly as appeals to self-interest.

An alternative to emphasizing self-interest as a primary motivator, and attempting to show that rational self-interest leads to ideological behavior of national security, is to recognize that we are perfectly capable of acting rationally in a broader sense which is already ideological because of its anonymity assumptions. More importantly, we can cultivate a disposition to be rational, much as we have cultivated a reliance on self-interest. Empirical rational expectations theories can explore this possibility and, in so doing, guide our moral development.