Paradigms, conventions and the entrepreneur: a review article and response - response to "Paradigms and Conventions: Uncertainty, Decision Making and Entrepreneurship" by Young Back Choi

American Journal of Economics and Sociology, The, Jan, 1997 by Steve Pressman

Introduction

This book, Paradigms and Conventions (Choi 1993) is both stimulating and exasperating. It contains penetrating insights into the decision making process, into relationships among individuals, and into how human interaction plays out in the economic sphere. Simultaneously, it presents a sharp critique of neo-classical economic theory, and attempts to develop a rigorous alternative to the orthodox analysis of decision making and the role of the entrepreneur.

In addition to all of this, the breadth of knowledge contained in Paradigms and Conventions is remarkable. Besides drawing on the accumulated wisdom from economics, game theory, and the philosophy of science, Choi incorporates insights from psychology, sociology, linguistics, and anthropology into his book. Moreover, the work is peppered with Chinese fables, Platonic dialogues, a discussion of the etymology of the term "happiness," and anecdotes detailing Choi's experiences as a graduate student and a college teacher.

Yet, despite its richness and despite its sharp insights, Paradigms and Conventions contains many flaws. At base, these problems stem from the paradigm that Choi himself adopts. Worshipping the entrepreneur, and believing that any restrictions placed on the entrepreneurial spirit (including a progressive income tax) have undesirable consequences, Choi remains blind to alternative explanations of entrepreneurship and stretches his arguments to satisfy this preconceived conclusion. These weak arguments, alas, will not help overcome the conventional wisdom of neoclassical orthodoxy.

In what follows I focus on three problems: ambiguities in the concept of paradigm, the difficult relationship between paradigms and conventions, and how individual feelings of envy and the notion of social convention fail to provide a good justification for fully supporting entrepreneurship.

II

Choi on Paradigms

Choi borrows the notion of a paradigm from The Structure of Scientific Revolutions, Thomas Kuhn's (1962) classic work in the philosophy of science. Following Kuhn, Choi (1993, 7) interprets a paradigm to be a means of perceiving the world, but extends its reach to encompass the everyday behavior of human beings as well as the workaday behavior of scientists.

Since paradigms provide the foundation for Choi's reconstruction of the entrepreneur and his argument in favor of entrepreneurship, it is important that this concept be clear. Unfortunately, it is anything but clear. Margaret Masterman (1970) has pointed out numerous problems with Kuhn's notion of a paradigm. At the top of her list is a serious ambiguity. According to Masterman, Kuhn used the notion of a paradigm in 21 different ways throughout his book.

A similar criticism can be levelled at Choi. He continuously uses the term "paradigm", but never clearly defines it. At times Choi means one thing by this expression, and at other times he means something quite different. By my count, Choi uses "paradigm" in at least nine different ways.

Paradigm sometimes refers to worldviews, the popular interpretation of what Kuhn was driving at in The Structure of Scientific Revolutions. At other times (48), paradigms involve definitions of terms, or a personal understanding of language. At yet other times, paradigms are things that focus mental activity (32). Instead of focusing mental activity, paradigms sometimes provide the wherewithal to distinguish what is important and relevant from what is not (33). Going even further, Choi claims that paradigms provide "selective vision" (39) and "a biased viewpoint" (43). Taking a very different line, Choi (1993, 53) contends that paradigms provide expectations regarding the future.

In addition to their psychological component, paradigms are also a prerequisite to action. According to Choi, people act based upon their paradigms. By eliminating uncertainty, paradigms make action possible. "Once a paradigm is identified, the appropriate course of action is clear. Doubt is no longer entertained, and uncertainty is resolved" (Choi 1993, 46).

Finally, Choi compares his notion of paradigm to Nelson and Winter's (1982) notion of "skill", which provides a set of "simple rules" or habits that organize our actions or activities. As such, paradigms are conventions that we adopt in order to make our lives more manageable.

Despite these ambiguities in the notion of a paradigm, Choi (1993, 7) asserts two "facts" regarding paradigms and human action. First, "every human action presupposes a paradigm;" and second "individuals will continue searching for a paradigm until they find one."

While unproblematic in isolation, these "facts" generate problems in conjunction. If every action requires a paradigm, and if searching for a paradigm is itself an action, then a vicious circularity arises. Searching for paradigms is a human act, and as such requires a paradigm. Paradigms thus require paradigms (or meta-paradigms), which in turn will require further paradigms (or meta-meta-paradigms). We are caught in an infinite regress.