Perhaps the most important single contribution that normative rational-choice models can make to clearer thinking is their emphasis on the fact that in most situations we cannot realize all our social values at the same time so that a choice among different values is necessary. For example, economists know that we usually cannot decrease unemployment without increasing inflation and conversely; thus we have to choose between a little more employment and a little more price stability, as we can have one only at the expense of the other.
Similar choices seem to be necessary in other fields. If we give greater political participation to the electorate in political decisions (e.g., by popular initiative, referendum, etc.) then we probably decrease the protection given to minority rights or to the right of dissent. Thus one democratic value (popular participation) can be increased only at the expense of other democratic values (minority rights or the right of dissent). Again, we may have to choose.
It can of course also happen that we have to choose between political values and economic values. For example, an underdeveloped country may be able to increase its rate of economic growth only at the expense of some decrease in democratic freedoms, etc.
Such choices are never pleasant to make, but no intelligent policy decisions are possible without recognizing that such choices have to be made whenever the situation requires them.
However, the traditional attitude among social scientists in general has not been very favorable to recognizing this. Rather, the implicit assumption usually has been that "all good things come together," all desirable factors have positive correlation with one another. Greater popular participation can only make the political system "more democratic" in all respects; greater democracy can only increase the rate of economic development; more freedom and more permissiveness for the child can only improve his academic progress, etc.
We shall call this implicit assumption the Positive Correlation Fallacy. It has been one of the main obstacles to clear thinking among social scientists, and is probably responsible for a high proportion of the bad policy recommendations we have made. Extensive use of rational-choice models in analyzing our own values and in making policy recommendations is no doubt the surest way of avoiding this fallacy.
(John C. Harsanyi, "Rational-Choice Models of Political Behavior vs. Functionalist and Conformist Theories," World Politics 21 [July 1969]: 513-38, at 537-8 [italics in original])
