Formalism (in economic anthropology, economics, and political science, etc.) assumes agents are self interested maximizers subject to the constraint of scarcity.
But self interest can be rightly expanded to include sentiments and motivations and preferences such as altruism, and can be amended to contain the interests of the collective.
People are SUBSTANTIVELY RATIONAL. But that is not a very risky claim. I'm an economist and assuming this works for a lot of stuff.
This is not to say that proceeding with formalist methods and deductive reasoning is appropriate for every situation. Assuming self-interest is a reasonable methodology in many instances, particularly in Western, capitalist countries.
This could proceed into a discussion of Polanyi and the imbeddedness or disembeddedness of an economy...
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Methodological individualism is another premise which is not always appropriate.
But, my point is that formalism is one of many useful tools in our tool box. And I'm an economist...
While I agree that analyses starting from assumptions of "homo economicus" should not be completely discarded, I think it's equally important not to naturalize some self interested, utility maximizer as THE human actor par excellence. To say that humans are self-interested in the current neoliberal formulation, means that one behaves in line with an entrepreneurial, market-driven logic, concerned with efficiency and short-term profit. I think, however, that Foucault and others have persuasively shown that proponents of neoliberal rationality have attempted to construct homo economicus as part of their (bio)political projects. What better way to maximize efficiency/economic gain than to produce individuals who act in a certain manner without intervention from the heavy-hand of the state? The state need not intervene when we have docile bodies already prepared to act in line with a neoliberal logic! This is not natural behavior however...it is constantly contested/resisted.
I also worry that when we start to include altruistic behavior under the label of "self-interested" we begin to border on tautology (in other words, can almost any behavior be explained as self-interested depending on what the individual considers to be "rational?"). Is it irrational for a poor person to vote Republican (perhaps because they consider religion more important than economic consideration)? Are they voting against their self interest?
No one is denying that homo economicus is ideological, and socially reinforced... in fact I'm complicit:
Here's an example: I teach my intermediate microeconomics students (formalist) game theory. Some may protest (like my sociologist friend in Boulder) that game theory does a lousy job at explaining reality/society. That's true. But I teach them game theory in order for them to learn important abstract thinking skills which will help them navigate our business-minded, competitive, contemporary society.
A microeconomist might say that it is irrational [sic] to save for consumption of heavenly goods in the afterlife.
The poor person voting republican, in my mind, is irrationally self-interested. But that statement contains an implicit value judgement.
I think that one of the things we're brushing up against is that the choice of one's analytic lens enables certain kinds of thinking and disables other kinds. To use your game theory example, the Prisoners Dilemma is commonly used in International Relations theory to highlight the difficulty in addressing global public goods problems (concerning the environment, for instance)...the argument goes that states have incentives to free ride, thus we need some sort of collective institutional arrangements at the international level.
This type of thinking is important in that it enables one to think strategically about the incentives that might induce a certain state to cooperate. However, when we prescribe action based upon our assumptions of states as rational, self-interested actors, the normative implications of these assumptions become evident (and problematic).
Within IR theory, for instance, liberal institutionalists would argue that powerful states (like the US) will not enter into agreements that are redistributional in nature or that do not conform to a strictly neoliberal logic. International negotiations and agreements should therefore appeal to this self-interest. I don't buy this, however....the state is a site of contestation between various groups, and if a certain constellation of actors take control, this assumption may no longer hold. Maybe distributional issues become important under an Obama administration? I don't think would be a mere shift in the US interest...it represents the incorporation of moral concerns into foreign policy (and I think if we looked closely at the empirical record, those concerns would always be present to some degree).
My point is that game theoretical thinking enables certain analyses, but it disables many critical efforts to undermine the status quo. I think it's a valuable tool, but we should maybe keep in mind the dangers of pulling it out too often.
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