Rationale and Culture

In “Theorising Capitalist Transformations through Culture” (EPW, 9 February 2019), which reviewed Manuel Castells’ Another Economy Is Possible: Culture and Economy in a Time of Crisis, Rajan Gurukkal argues that economic practices are shaped by cultural values, and critiques the postulate of rationality of individual behaviour in the mainstream new classical economics.

This is not a new finding and alternate explanations have always been available. In Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, Abhijit Banerjee and Esther Duflo argue that when the poor spend a lot on ceremonies, including marriages and festivals—often going into debt—it could seem like irrational behaviour. However, there exists an underlying rationality to this behaviour. Living with deprivation, they indulge in some extravagant outlay in order to relish an occasion of emotional fulfilment, which is otherwise unattainable.