Structure and Dynamics

Experimental economics and bounded rationality are very different from one another, but both claim to offer a more general and more empirical type of economic theory. Experimental economists, in addition, claim that their game-theoretic analyses provide rigorous, calculable, inferences from individual decisions to society as a whole. They claim to be describing the basis of social stability, although the argument depends on a unitary conception of “society” that ethnologists have now largely rejected. Both groups view rationality as inherently or originally individualistic and “utility maximizing” rather than inherently or originally social—albeit for entirely different reasons. Neither recognizes rationality as inherently bound up with organizations. These views have no basis in ethnography and are sharply in conflict with the stress on local knowledge in the most successful contemporary development policies. A crucial empirical issue is the nature and power of indigenous decision algorithms. The economists treat them as non-existent, insignificant, or erroneous. I show that they are organizationally situated and part of the organizational process, genuinely optimizing, and the basis of cultural ecological adaptation. Moreover, it is this external adaptation, not an internal game-like system of self-perpetuating rules, that is the ultimate basis of social stability, as well as dynamism.