RATIONALITY AS PROCESS AND AS PRODUCT OF THOUGHT

Abstract

The opportunity to deliver the Richard T. Ely Lecture, from which this chapter is derived, afforded me some very personal satisfactions. Ely, unbeknownst to him, bore a great responsibility for my economic education, and even for my choice of profession. The example of my uncle, Harold Merkel, who was a student of Commons and Ely at Wisconsin before World War I, taught me that human behavior was a fit subject for scientific study, and directed me to economics and political science instead of high energy physics or molecular biology. Some would refer to this as satisficing, for I had never heard of high energy physics or molecular biology, and hence was spared an agonizing weighing of alternative utiles. I simply picked the first profession that sounded fascinating. Ely's influence went much further than that. My older brother's copy of his Outlines of Economics – the 1930 edition – was on our bookshelves when I prepared for high school debates on tariffs versus free trade, on the Single Tax of Henry George. It provided me with a sufficiently good grounding in principles that I was later able to take Henry Simons' intermediate theory course at the University of Chicago, and the graduate courses of Frank Knight and Henry Schultz without additional preparation. The Ely textbook, in its generation, held the place of Samuelson (1947) or Bach in ours.