Wednesday, March 14, 2012

[Opinion] The Method of Rational Reconstruction

1. For all his brilliance, there is one aspect of the influence of the philosopher Ludwig Wittgenstein (1889-1951) that is really bad: he has a habit of doing something without explaining why it is being done.

Human beings are rational creatures; our actions are means to ends.

Without understanding the goal, purpose or aim of an action, one is at a lost in evaluating the action.

2. It is with appraising a theory as with appraising some actions.

In appraising or criticizing any theory, be it a theory of economics, psychology, sociology, physics, chemistry, biology, theology or religion, one must first understand what that theory is about.

But how does one understand a theory?

The method of rational reconstruction is a method of understanding theoretical work.

"This method, which is known as 'situational analysis' or the method of 'rational reconstruction', regards a theory as a solution to a problem. To understand a theory is to conjecture the problem to which it is a tentative solution and to explain why the solution may be considered satisfactory, or otherwise significant, to the theorist." (Wong 1978, 7)

3. For those whom have any interest in methodology, "Chapter 2: Understanding and criticism" (pages 9 to 24) of Stanley Wong's The Foundations of Paul Samuelson's Revealed Preference Theory (1978) is pure gold.

A method is a series of steps a person follows to achieve a goal.

Methodology is the study of methods.

Although applied to economics theory in Stanley Wong's book, the method of rational reconstruction is completely general in nature - it can be used to understand a theory in any field of study.

Stanley Wong's book is now considered a classic in economic methodology.

"Chapter 2: Understanding and criticism" is written in such good prose that anyone with a secondary school education should be able to understand it - sans the economic references.

4. Some quotations to whet your appetite:

(Wong 1978, 9): "Our study ... is based upon solutions to two general problems: the problem of understanding any particular theory; and the problem of criticizing it."

(Wong 1978, 9-10): "Our solution to the problem of understanding a theory emphasizes, above everything else, the objectives that the theorist, qua theorist, wishes to achieve. In other words a theory is interpreted as a solution to a problem, i.e. the creation of a theory is seen as being goal-directed or as a rational action. We are therefore seeking to understand why the theorist regards his theory as an adequate response to the problem-situation as he sees it. The problem-situation or logical problem-situation comprises the objectives and their logical interrelations. Thus, the problem of understanding a theory becomes a problem of understanding a problem-situation in the context of which the theory was proposed."

(Wong 1978, 11): "Our solution to the problem of criticizing a theory is to distinguish between internal and external criticism. Internal criticism is criticism within a (reconstructed) problem-situation. External criticism is criticism of the problem-situation itself."

(Wong 1978, 11): "A rational reconstruction or situational analysis of a theory consists of two steps. First, we reconstruct hypothetically the problem-situation in the context of which the theory was proposed. In simple terms we are specifying the problem to which the theory is a proposed solution. Second, we explain why the theorist (or someone else) might think that the theory is a satisfactory solution to the problem."

(Wong 1978, 11): "The problem-situation comprises the theorist's objectives and their logical interrelations. The primary objectives upon which the theorist's attention is focused are called theoretical aims. They generate the main question(s) to which the new theory is directed."

(Wong 1978, 11-12): "Apart from the theoretical aims, the theorist has objectives that form the background against which the main questions are raised. They are known as situational constraints. By placing restrictions or constraints on the choice of an answer (or answers) to the questions that express the theorist's aims, these objectives create the circumstances in which the theorist's problems arises, turning the questions into a problem. Thus the problem of the theorist is to devise a theory that not only attains the aims but also satisfies the situational constraints."

(Wong 1978, 13): "Often, a theory is an integral part of a general theory; it is contributing to a solution of a general problem. Therefore, the choice of a theory to attain the theoretical aims of the less general theory is constrained by the consideration that it must not conflict with the objectives of the general problem."

(Wong 1978, 19): "It is useful to distinguish between two types of solutions to a problem: positive and negative. A problem is solved positively if a solution is found that achieve simultaneously all the theorist's objectives. This is what is usually meant by a solution to a problem."

(Wong 1978, 19-20): "A problem is solved negatively if the solution states that it is impossible to achieve simultaneously all the objectives of the problem-situation. A negative solution is an admission of failure but it can, nevertheless, be used as an instrument of learning."

(Wong 1978, 23): "Our solution to the problem of how to criticize is to divide criticism of a theory (our rational reconstruction of it) into two categories: internal and external. Internal criticism is criticism within the context of the (reconstructed) problem-situation, i.e. we are accepting the theorist's aims and constraints without dispute. It consists by and large of criticisms of the validity of logical and mathematical arguments. Since logical and mathematical theories are usually accepted in economics without question, internal criticism of this type is easily accepted by protagonists in a debate."

(Wong 1978, 23): "In addition, internal criticism includes evaluation of the consistency of the various objectives of the theorist and of the consistency of the (tentative) solution with the theoretical aims and constraints. Criticism of this type is the most devastating. The inconsistency of the objectives implies that the problem is unsolvable. The violation of a situational constraint by a proposed solution gives sufficient grounds for rejecting the solution."

(Wong 1978, 23): "External criticism, on the other hand, is criticism from outside the (reconstructed) problem-situation. In this category fall criticisms of the importance of the problem, of the accuracy of the theorist's representation of the situational constraints facing him and of the objectives themselves."

5. A Revised Edition of Stanley Wong's book came out in 2006.

What is new consists of:

(a) a new Foreword by Philip Mirowski ; and

(b) a new Preface and acknowledgments by Stanley Wong.

But are worthwhile read; otherwise, the text is unchanged.


Wong, Stanley. 1978. The Foundations of Paul Samuelson's Revealed Preference Theory: A Study by the Method of Rational Reconstruction. London: Routledge & Kegan Paul.

Wong, Stanley. 2006. The Foundations of Paul Samuelson's Revealed Preference Theory: A Study by the Method of Rational Reconstruction, Revised Edition. London: Routledge.