ABSTRACT
As described in the previous chapter, the genesis of neoclassical economics was a transformation of classical political economy into a scientific discipline, starting from marginalism up to the present mainstream economics, and based on Samuelson’s and Friedman’s models. While classical political economy was grounded in the old classical liberalism of the nineteenth century, neoclassical economics has been much more related to neoliberalism as it developed in the twentieth century. A similar story happened to the notion of the individual within economic theory: classical political economy was mainly focused on social classes, and individuals were considered free when they operated in a free market and society. In neoclassical economics, individuals have been transformed into rational maximizer agents, especially within the Chicago school of economics (Van Overtveldt 2007; Emmett 2008). Paradoxically, in neoliberalism, individuals gradually lost their freedom: in a neoliberal society, we can attest to a kind of inverse relation between individual rationality and individual liberty. Without the transformation of individuals into rational agents, which occurred in neoclassical economics, the pervasive role of neoliberalism as well as its powerful rhetoric could not be fully understood. Hence, this chapter will deal with the building of a rational choice theory
within the perspective of the relationship between neoclassic economics and neoliberalism. Rational choice theory is the methodological and anthropological pillar of neoclassical economics and is focused on the methodological assumption that individuals are rational economic agents able to rank their preferences, and, given budget constraints, they can choose the optimal solution. Although the formal nature of preferences as well as the concept of rationality have been deeply problematized and criticized within and outside the neoclassical economic theory, these critiques did not reduce the power of that paradigm. The two theorems of welfare economics are the translation of rational
choice theory from an individual level to a social level.1 They are based on the assumption that a society will develop and increase its welfare by maximizing its social utility function in the same way individuals maximize their expected utility function.2
