Rationality and morality

We live in a post-rational world, where everyone tries to be as moral as possible and it is fashionable to boast about emotional-intelligence credentials: the ability to feel what other people are feeling. This is supported by studies in behavioural economics, which show that people are highly irrational, displacing the dry old studies of 'economic man' that sought to explain how individuals make rational choices designed to maximise their utilities. 

In a surprising turn of events, there is nowadays an element of social pride to be derived from declaring that we are highly irrational and slaves to our passions. Appeals are made to morality instead of rationality.

If morality is all about subjective opinions, it's quite an easy goal to aim for in justifying decisions based on feelings. "I was only trying to do the right thing" or "I acted from the purest of motives". 

But moral conduct is not an alternative to rational conduct. 

​Moral conduct is therefore conduct in accord with right reason: "If it is said that moral conduct is rational conduct, what is meant is that it is conduct in accordance with right reason, reason apprehending the objective good for man and dictating the means to its attainment". 

Murray Rothbard, The Ethics of Liberty.
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The fear that rational action may part ways with morality arises from confusion about the meaning of 'morality'. Most people understand morality simply to mean 'doing the right thing' or 'being a nice person' in a general sense - being kind, compassionate and loving. As popularly understood, the conflict between rationality and morality is therefore another way of expressing the conflict between doing what makes sense and behaving in a way that others will consider 'moral' - kind and unselfish. Morality, in other words, is understood as a measure of social approval. Moral people virtue-signal, to indicate to others that they are good people, without regard to the meaning of their words or the effects of their actions. They are 'moral' without being rational. And proud of it.

Where an individual's rationality leads to decisions that other people regard as selfish, maximising his private utility, contributing nothing to what others would regard as the 'social good', then it is said to be 'immoral'. Since rationality is a process of linking your means to your desired ends, and choosing the means that will be most likely to achieve your desired ends, then it is easy to see how rationality and morality (understood as public approval) can part company in popular perception. Choosing to work hard and save money to achieve financial freedom would be rational in the classic sense (the means chosen will certainly lead to the desired end) but it will result in a situation where some people have more money than others: economic inequality. This in turn raises moral concerns, i.e. concerns that other people will regard the situation as unfair, hence immoral.

Nobody wants to build a free market society that lacks any concept of public morality or that fails utterly to be perceived as moral in the popular view. One way to achieve this is to recognise the moral content of rational decisions, by showing that in some circumstances, a decision cannot be rational unless it is also moral. For example, while it is usually rational to pursue your own self-interest and maximise your own utility, there may be situations where pursuing your own interests will result in harm to someone else, so out of your 'moral' desire not to cause harm, you impose constraints on your behaviour. Other market actors do the same thing, and we all desist from pursuing our interests in ways that will harm the other person:

Moral theory is part of the theory of rational choice, arising from the structure of interaction, in which persons recognize a role for agreed mutual contraint in bringing about fair mutual advantage.

David Gauthier, Morals by Agreement.
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This means that the rational pursuit of wealth maximization incorporates common-sense perspectives otherwise known as 'commercial morality' - in maximizing my wealth it is not rational to stab my neighbour in the back and cheat him at every possible opportunity, because a market in which everyone behaves in this way would really suck. It is better to keep your promises and pay your dues even when you have an opportunity to exploit your partners, because it is surely better for your own purposes if your partners know that they can trust you. Behaving in an untrustworthy manner is therefore irrational. In this way, almost by accident, people behave like moral agents when they make rational choices. You set out to maximize your own wealth and discover along the way that actually, you're a pretty decent person.

​We must conclude by giving economic man a moral dimension...

Morality may thus be placed within the bounds of the maximising activities of economic man, given our enlarged conception of the economic man [who pursues constrained maximisation], and distinguished from prudence, from the direct pursuit of one's wants  and desires.

The moral man is no less concerned with his own well-being than the prudent man, but he recognises that an exclusive attention to that well-being would prevent him from participation in mutually beneficial agreements.

Gauthier, Reason and Maximisation.