Individual welfare

Aims

In chapter 1 we introduced the theme of this book: the analysis of the political process and the evaluation of its effects. The starting point for our examination will be the postulate of methodological individualism, i.e. our analysis and evaluation will depart from the preferences and behaviour of the individual citizen.

Weber ((1922)1972, p. 12) classified human conduct as traditional, affective, value-rational and purpose-rational. Traditional social conduct is determined by custom. Social conduct is determined affectively, especially emotionally, when it is guided by feelings and emotions which react to external stimuli. Value-rational conduct is determined by the conscious faith in the absolute worth of the conduct as such, independent of any aim. Purpose-rational conduct is, on the contrary, directed at the achievement of an aim. What is true for conduct as a whole is true for decisions in particular. According to Weber a person decides purpose-rationally if he aims to achieve certain results by his conduct. These results are the purpose of the decision.

Henceforth we fill in the postulate of methodological individualism by assuming that individual behaviour is purpose-rational. This assumption is part of an honourable tradition in economics, and is also used in other social sciences. The social psychologists, Krech, Crutchfield and Ballachey (1962), for example, observe that ‘human action is motivated, or goal-directed’. Simon (1978, p. 5) even states: ‘The view of man as rational is not peculiar to economics, but is endemic, and even ubiquitous, throughout the social sciences.’