Customer Reviews

Rationalizing Capitalist Democracy: The Cold War Origins of Rational Choice Liberalism

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The author apparently forgot what he had written on pp.258-265 and 290-292 of his own book.His analysis on these pages correctly demonstrates that it was Jeremy Bentham who was the founder of rational choice theory.However, Bentham's approach was never obscure or fell from grace.Bentham's utility maximization approach was the core of neoclassical economics from 1870 to the present.Bentham was the first to argue that all decision makers can calculate the odds of the set of different,possible alternative courses of action and pick out the best probable one .Bentham's main students,J B Say,David Ricardo,James Mill,and Nassau Senior,all based their work on Bentham's 1787 work that directly challenged the virtue ethics approach of Adam Smith.The author's belief, that rational choice theory was rescued from oblivion by researchers working at the Rand Corporation starting in the 1940's, overlooks D Ellsberg's early 1960's work ,carried out at Rand ,that recognized,like Keynes had some 50 years before,that the rational choice approach is a special theory.

Bentham's approach was reinterpreted and updated technically ,using more advanced mathematics, by Frank P Ramsey,Bruno De Finetti,and J L Savage.A von Neumann -Morgenstern utility function was later incorporated.The end result was the Subjective Expected Utility (SEU) approach ,based on linearity and additivity.The author could have provided an effective critique of SEU had he been aware that J M Keynes had already demonstrated ,in both his A Treatise on Probability in 1921 and his 1909 Cambridge Fellowship Thesis of 1909,that the general case was one of non additivity and non linearity.SEU is a special case only.SEU can't deal with non-additivity or non linearity.It can never be anything more than a special theory at best.

Amadae has written a scholarly book that is inviting, informative, and thoroughly researched. Prof. Amadae has a broad command of this subject matter. If you are interested in the history of 20th-century political economy, this is a must-read. Highly recommended.