In China, there are 6 boys born for every 5 girls; the result of an age old preference for sons combined with widespread use of sex selection technology.
It's tempting to ascribe son preference to culture and leave it at that. However, for an economist, "culture" is a lousy explanation. It has no only trivial predictive value. Will the preference for sons persist over time, or will it gradually fade away? Cultural explanations cannot say: culture simply is what it is.
Another problem with "culture" is that it can explain anything. People in Uttar
Pradesh select for sons?" It must be their culture. People in Kerala don't select for sons?" It must be their culture. Since "culture" is compatible with any conceivable set of facts, it is not falsifiable.
From a scientific standpoint, theories that can, potentially, be proved to be false are the best type of theories. Why? It's impossible to prove that any theory about the world is true. For example, once upon a time, Europeans had a theory: "All swans are white". They believed it was true, because they had observed thousands of swans, and all of them were white. But, of course, it wasn't, as the Europeans discovered when they went to Australia.
Since we can never prove our theories to be true, the best we can do is develop theories with testable predictions, and test them. Try as hard as we possibly can to show that the theory is false. If the theory stands up to all of our tests, then we accept it – for now.
"Culture" as an explanation also violates what Eric Crampton calls "the first rule of the microeconomists club": methodological individualism. A good economic explanation starts with the choices of individual rational actors. It begins with the premise that people are, fundamentally, all alike – we want social status, reproductive success (or sex, anyways), economic security. What looks like differences in tastes are, in fact, differences in ways of achieving those fundamental goals that we all share.
For example, in the 1960s, children begged to have Hostess Twinkies in their lunches, because in a world where most moms stayed at home and baked, bought goods were scarce and hard to come buy, hence were a high status item. Now, children beg for home made cookies in their lunch, because in a world where most parents are too busy to bake, home made cookies are scarce and thus high status.
Methodological individualism states that the best economic stories explain the world in terms of the choices of individual rational actors, constrained by prices and incomes. Becker and Stigler's article De gustibus non est disputandum is a forceful statement of this position:
On the traditional view [what I am calling here "cultural explanations"],
an explanation of economic phenomena that
reaches a difference in tastes between people or
times is the terminus of the argument: the problem is abandoned at this point to whoever studies
and explains tastes (psychologists? anthropologists? phrenologists? sociobiologists?). On our
preferred interpretation, one never reaches this
impasse: the economist continues to search for
differences in prices or incomes to explain any
differences or changes in behavior.
The Becker-Stigler view does not imply that culture or preferences are unimportant. Rather, it is rallying cry for economic imperialists, a call for economists to take culture, preferences, and all of the other phenomena ignored by previous generations, and explain them using the tools of rational choice theory.
According to this approach, "culture" is the beginning of an explanation, not the end. Why is there son preference is some places and not in others? What are the advantages and disadvantages, the costs and benefits, of sons? How can son preference persist?
The phrase methodological individualism isn't used much these days – it doesn't even have a half-decent wikipedia entry. I don't think this is because the early critics of methodological individualism, such as Kenneth Arrow, won the day. Rather, I think it's a combination of factors. Methodology – what some would call ideology – gets little time in the economics curriculum. In judging the quality of research, technique — identifying variation, nifty econometrics — are more important than methodological purity. Behavioural economics came along, and was able to explain phenomena that the old-school Chicago approach couldn't.
That economics is more open to alternative types of explanation than it was 20 or 30 years ago is a good thing. Still, it behooves anyone contemplating a career in economics to know what counts as a good explanation, and why.
Worthwhile Canadian Initiative 
Mandos – every country I know that has, or has had, very low or no tuition fees also had small post-secondary sectors, that were very difficult to get into, and where the wealthy and/or politically powerful were able to get their offspring free university places.
But these countries—the developed ones, at least—also tend to have flatter income distributions and more access to middle-class lifestyles for people that don’t get into higher-ed. Or they used to until recently. In the limit, university educations simply become another choice for those inclined.
I mean, contrast this to the usual bête noire, the USA and its enormous student debt bubble that apparently now rivals credit card debt…without the possibility of default.
Min:
“Who says that culture is unexamined, unstudied, and unquestioned? ”
There are people who examine, study and question culture. And there are people who say “it’s culture” and leave it at that. This post is directed towards the latter group, not the former.
“Much the same can be said of evolution as an explanation. It has only trivial predictive value.”
No, that’s overly dismissive – take a look at the modern literature on evolutionary biology.
Evolution has a great deal in common with rational choice theory, only it’s genes maximizing reproductive success rather than firms maximizing profits or individuals maximizing utility. Both can be used to tell “just so stories”, justifying the status quo. But they don’t have to be.
…with effects that don’t, you know, appear to be a a particularly radical or large alleviation of the problem of poverty. Those of us who never adopted methological individualism into our thinking are just not surprised at the modesty of the results.
If you think that preferences just fall from the sky, and we all have exactly the same preferences, then yes, you can ignore culture.
Since that is self-evidently false, you can’t ignore culture.
Darren, saying “culture is a lousy explanation” is very different from ignoring culture.
People who simply shrug their shoulders and say “it’s culture” are as guilty of ignoring culture – in the sense of not exploring, interrogating, investigating it – as anyone else.
The methodological individualist research agenda is precisely not preferences just fall from the sky. It explains the origin of preferences.
Frances,
You write:
“The methodological individualist research agenda is precisely not preferences just fall from the sky. It explains the origin of preferences.”
Don’t agree. Since you cite Becker-Stigler, I’d encourage you to read Chapter 14 of the most excellent (and, sadly, late) Mark Blaug’s indispensable “The Methodology of Economics” (the text of which should be tattooed on the frontal lobes of every economics doctoral candidate). In this chapter, Blaug writes at length about what hardcore methodological individualism has produced in the Chicago School “new economics of the family”. He concludes that, despite all their grandiose claims, Gary Becker and his disciples have revealed very little about the world that was not already known. Rather, they have carried out what Blaug describes as a “verificationist” research program:
“…begin with the available evidence about human behavior in areas traditionally neglected by economists and then congratulate ourselves that we have accounted for it by nothing more than the application of standard economic logic. But what we never do is to produce really surprising implications directing our attention to unsuspected ‘novel facts’, that is, facts that the theory was not specifically designed to predict” (p. 226)
In this approach, preferences, far from being explained, are assumed – in fact, assumed to be whatever is necessary to reconcile the broad utility-maximizing story being told with the particular facts at hand. This is done subtly – by ensuring there are always enough free parameters in the model to reproduce any set of observed correlations – but the result is still pure formalism.
This case is instructive, I think, because it is typical of the why and how methodological individualism as practised in economics. The ultimate purpose here is really not to extend the science of behaviour, but to promote a certain view of human psychology and a related moral outlook. The psychological view is that all human behaviour can and should be understood as self-aggrandizement and nothing else. And the moral bit? In the words of a former grad school colleague: “The currency speculator trying to make a killing and the guy helping an elderly lady across the street aren’t any different. They do what they do for the same reason…they’re both maximizing their own utility. If the second guy didn’t get something from helping the lady he wouldn’t do it. So, if you criticize the first guy for being selfish you have to criticize the second guy as well.”
Ok I think you need honestly think the following through:
I absolutely agree with you that just stating “culture” is not an explanation in itself. I don’t know who would say otherwise.
However, a large part of culture is actually what most people would call common sense knowledge: the cognitive map of categories people build to navigate their practice. Now because practice is relative to a specific activity, that practice and the relative cognitive categories are structured by the properties of that said activity and its organization in social spaces. In a social field the people who have the most power (through different forms of capital: be it cultural, symbolic, social or economic) are better situated to define the parameters of that said activity and even implement normative or institutional innovations that can transform the very meaning of the activity. This changes the possibilities in terms of the “possible moves” within a given social space (relative to an activity) – what you would call “choices”.
I agree that rationality can play a role in explaining the choices people make and also part of the very struggle that attempts to define the meaning of the activity (and therefore the possible choices). The problem is that it is the contingent history of a field that structures the layout of the game (and its very definition) at any given time. No one who engages in a field is a blank slate shaping these cultural constructs with nothing but rational self-interest. Actors are already “socialized” (for lack of a consensus on a better term), that is to say that the “rationality” and “preferences” they exhibit are already structured by their interaction in the field at a given moment in its history. That is why culture (as integral to the materiality of the social interactions) is not reducible to methodological individualism.
Nice job, it’s a great post. The info is good to know!