Against The Parsimony

American Economic Association

Against Parsimony: Three Easy Ways of Complicating Some Categories of Economic Discourse
Author(s): Albert O. Hirschman
Reviewed work(s):
Source: The American Economic Review, Vol. 74, No. 2, Papers and Proceedings of the NinetySixth Annual Meeting of the American Economic Association (May, 1984), pp. 89-96
Published by: American Economic Association
Stable URL:http://www.jstor.org/stable/1816336 .
Accessed: 13/04/2012 11:17
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Against Parsimony: Three Easy Ways of Complicating
Some Categories of EconomicDiscourse
By ALBERT 0. HIRSCHMAN*
In his well-known article on "Rational
Fools," Amartya Sen asserted that "traditional [economic]theory has too little structure" (1977, p. 335). Like any virtue, so he
seemedto say, parsimony n theoryconstruci
tion can be overdoneand somethingis sometimes to be gained by making things more
c
I
complicated. have increasingly ome to feel
this way. Some years ago, Isuggested that
criticismfrom customersor " voice" should
be recognizedas a force keeping management of firms and organizations"on their
toes," alongsidewith competitionor "exit,"
and it took a book (1970) to cope with the
resulting complications. Here I deal with
various other realms of economic inquiry
that stand similarly in need of being rendered more complex. In concluding I examine whether thevarious complications
have some elementin common-that would
in turn simplifyand unify matters.

tions, and preferences, to ask themselves
whether they really want these wants and
t
a
preferthese preferences, nd consequently o
t
form metapreferences hat may differ from
their preferences. nsurprisingly,t is a phiU
i
losopher, Harry Frankfurt(1971), who first
put matters this way. He argued that thisability to step back is uniquein humans,but
is not presentin all of them.Those who lack
this ability he called "wantons": they are
entirely, unreflectivelyin the grip of their
whims and passions.
As I have pointedout before(1982, p. 71),
certaintyabout the existenceof metapreferences can only be gained through changes
in preferences,that is, through changes in
actual choice behavior. Ifpreferencesand
a
metapreferences lways coincide so that the
agent is permanentlyat peace with himself
no matter what choices he makes, then the
h
metapreferences ardlylead an independent
existenceand are mere shadowsof the prefI. TwoKindsof PreferenceChanges
erences.If, on the other hand, the two kinds
of preferencesare permanentlyat odds so
A fruitful distinctionhas been made, by
that the agent alwaysactsagainst"his better
Sen and others, between first- and second- judgment," then again the metapreference
orderpreferences, r betweenpreferences nd can not only be dismissedas wholly ineffeco
a
metapreferences,espectively.I shall use the
r
tive, but doubts will arisewhetherit is really
latterterminology ere.Economicshas tradi- there at all.
h
tionally dealt only with (first-order) referp
Changes inchoice behaviorare therefore
ences, that is, those that are revealed by
essential for validatingthe concept of metaagents as they buy goods and services.But preferences; onversely,this conceptis useful
c
the concept of metapreference ust be of
m
in illuminatingthe varied nature of preferconcernto the economist,to the extent that ence change, for it is now possible to dishe claims an interest in...