, and it is hard to see how the selfishness of the (probable) majority can "cancel out" this self-sacrifice. It seems that we really have to modify the assumption of self-interest in order to accommodate the evidence. People often do act on non-self-interested values -- but when they do so they act on their own values, not those of the government, some philosopher, or (most important) the observing economist. We might call this assumption "rational individualism" rather than "rational self interest." But, as it turns out, it doesn't make much difference for the theory 
, except to make it more complicated. We shall avoid the complications here by adopting the analysis based on self-interest. What, then, is left of rationality if people are not always self-interested? A broader (but still neoclassical) neoclassical economics assumes that people choose in the way that best advances their own values, altruistic or self-interested as those values may be.
The suspicion that people are often irrational might be easier to deal with, since it is at least possible that deviations from rationality could be random and could cancel out. If they are not, then we may be able to make some adjustments as we go along. In fact, there is a good deal of evidence that real choices can deviate from rationality in predictable ways. To the extent that they do, we can understand their choices in two stages: first, understand what the rational choices would be, and, second, adjust that for any predictable irrationality. (Some economists will feel that the second step isn't necessary, but we can take the first step together).
This leads us back to the the distinction of positive and normative economics. Critics of neoclassical economics sometimes claim that economics is an apology for self-interest; that economics, like Gordon Gekko, holds that "greed is good." This is a misunderstanding. The assumption of rational self-interest is positive economics, an attempt to describe what is, not what ought to be.
But is it true? That is the criterion for positive economics, and we shall have to return to the question from time to time.
Assumptions and Critical Reason
