Homo Economicus Quotes

There is nothing natural or innate about the productivist behaviours we associate with homo economicus. That creature is the product of five centuries of cultural re-programming.

Homo economicus was surreptitiously taken as the emblem and analogue for all living beings. A mechanistic anthropomorphism has gained currency. Bacteria are imagined to mimic "economic" behavior and to engage in internecine competition for the scarce oxygen available in their environment. A cosmic struggle among ever more complex forms of life has become the anthropic foundational myth of the scientific age.

But if all maximizing models are really arguing is that “people will always seek to maximize something,” then they obviously can’t predict anything, which means employing them can hardly be said to make anthropology more scientific. All they really add to analysis is a set of assumptions about human nature. The assumption, most of all, that no one ever does anything primarily out of concern for others; that whatever one does, one is only trying to get something out of it for oneself. In common English, there is a word for this attitude. It’s called “cynicism.” Most of us try to avoid people who take it too much to heart. In economics, apparently, they call it “science.

The whole edifice of modern financial theory is, as described earlier, founded on a few simplifying assumptions. It presumes that homo economicus is rational and self-interested. Wrong, suggests the experience of the irrational, mob-psychology bubble and burst of the 1990's. A further assumption: that price variations follow the bell curve. Wrong, suggests the by-now widely accepted research of me and many others since the 1960's. And now the next assumption wobble: that price variations are what statisticians call i.i.d., independently and identically distributed-like the coin game with each toss unaffected by the last. Evidence for short-term dependence has already been mounting. And now comes the increasingly accepted but still confusing evidence of long-term dependence.

We are, after all, homo economicus.

If you look at economics textbooks, you will learn that homo economicus can think like Albert Einstein, store as much memory as IBM’s Big Blue, and exercise the willpower of Mahatma Gandhi. Really. But the folks that we know are not like that. Real people have trouble with long division if they don’t have a calculator, sometimes forget their spouse’s birthday, and have a hangover on New Year’s Day. They are not homo economicus; they are homo sapiens.

Homo economicus would cheat only if he stood to benefit by enough and if the odds of being caught were sufficiently low. So the mere fact that he does not have a reputation for being a cheat tells us only that he’s been prudent.

For four decades, since my time as a graduate student, I have been preoccupied by these kinds of stories about the myriad ways in which people depart from the fictional creatures that populate economic models. It has never been my point to say that there is something wrong with people; we are all just human beings—homo sapiens. Rather, the problem is with the model being used by economists, a model that replaces homo sapiens with a fictional creature called homo economicus, which I like to call an Econ for short. Compared to this fictional world of Econs, Humans do a lot of misbehaving, and that means that economic models make a lot of bad predictions, predictions that can have much more serious consequences than upsetting a group of students. Virtually no economists saw the financial crisis of 2007–08 coming,* and worse, many thought that both the crash and its aftermath were things that simply could not happen.

The idea of “bounded rationality” is now widely accepted, and its insights are fueling research throughout the social sciences. Even economists are increasingly accepting that Homo sapiens is not Homo economicus, and a dynamic new field called “behavioral economics” is devoted to bringing the insights of psychology to economics.

In effect, the poor person is a rich person left to fend for him or herself, without the support of institutions that help the person to take 'good' decisions.

However, even before the orgies of neoliberalism it was obvious that capitalism is not socially efficient. Market failures are everywhere, from environmental calamities to the necessity of the state’s funding much socially useful science to the existence of public education and public transportation (not supplied through the market) to the outrageous incidence of poverty and famine in countries that have had capitalism foisted on them.3 All this testifies to a “market failure,” or rather a failure of the capitalist, competitive, profit-driven mode of production, which, far from satisfying social needs, multiplies and aggravates them. This should not be surprising. An economic system premised on two irreconcilable antagonisms—that between worker and supplier-of-capital and that between every supplier-of-capital and every other4—and which is propelled by the structural necessity of exploiting and undermining both one’s employees and one’s competitors in order that ever-greater profits may be squeezed out of the population, is not going to lead to socially harmonious outcomes. Only in the unreal world of standard neoclassical economics, which makes such assumptions as perfect knowledge, perfect capital and labor flexibility, the absence of firms with “market power,” the absence of government, and in general the myth of homo economicus—the person susceptible of no other considerations than those of pure “economic rationality”—is societal harmony going to result.

studies are beginning to show that our ability to appreciate the intrinsic value of generosity, sharing and selflessness is central to maximizing our well-being. MAKING HOMO ECONOMICUS HAPPY When this theory is applied to people, Becker argues that we become Homo economicus in a very specific way: Everyone is a producer of his or her own happiness. We obtain our own utility, to use his language, “through the productive activity of combining purchased market goods and services with some of the house hold’s own time.

Pretty soon, however, I noticed something familiar. Most books are also about the exceptional. The biggest history bestsellers are invariably about catastrophes and adversity, tyranny and oppression. About war, war, and, to spice things up a little, war. And if, for once, there is no war, then we’re in what historians call the interbellum: between wars. In science, too, the view that humanity is bad has reigned for decades. Look up books on human nature and you’ll find titles like Demonic Males, The Selfish Gene and The Murderer Next Door. Biologists long assumed the gloomiest theory of evolution, where even if an animal appeared to do something kind, it was framed as selfish. Familial affection? Nepotism! Monkey splits a banana? Exploited by a freeloader!31 As one American biologist mocked, ‘What passes for co-operation turns out to be a mixture of opportunism and exploitation. […] Scratch an “altruist” and watch a “hypocrite” bleed.’32 And in economics? Much the same. Economists defined our species as the homo economicus: always intent on personal gain, like selfish, calculating robots. Upon this notion of human nature, economists built a cathedral of theories and models that wound up informing reams of legislation. Yet no one had researched whether homo economicus actually existed. That is, not until economist Joseph Henrich and his team took it up in 2000. Visiting fifteen communities in twelve countries on five continents, they tested farmers, nomads, and hunters and gatherers, all in search of this hominid that has guided economic theory for decades. To no avail. Each and every time, the results showed people were simply too decent. Too kind.

при всех весьма значимых различиях наши мировоззрения базируются на общем принципе: обе идеологии по характеру детерминистские. Но у вас расовый детерминизм, а у нас — экономический, но детерминизм. И вы, и мы верим, что человек не выбирает судьбу, она навязана природой или историей, и делаем отсюда вывод, что существуют объективные враги, что отдельные категории людей могут и должны быть истреблены на законном основании, просто потому, что они таковы, а не из-за их поступков или мыслей. И тут разница только в том, кого мы зачисляем в категорию врагов: у вас — евреи, цыгане, поляки и, насколько мне известно, душевнобольные, у нас — кулаки, буржуазия, партийные уклонисты. Но, в сущности, речь об одном и том же: и вы, и мы отвергаем homo economicus, то есть капиталиста, эгоиста, индивидуалиста, одержимого иллюзиями о свободе, нам предпочтителен homo faber. Или, говоря по-английски, not a self-made man but a made man, [ведь коммуниста, собственно, как и вашего прекрасного национал-социалиста, надо выращивать, обучать и формировать. И человек сформированный оправдывает безжалостное уничтожение тех, кто не обучаем, оправдывает НКВД и гестапо, садовников общества, с корнем вырывающих сорняки и ставящих подпорки полезным растениям.

Out of a single man, they get a thousand: homo economicus, homo politicus, homo physico-chimicus, homo endocrinus, homo skeletonicus, homo emotions, homo percipiens, homo libidinosus, homo peregrinans, homo ridens, homo ratiocinans, homo artifex, homo aestbeticus, homo religiosus, homo sapiens, homo historicus, homo ethnographicus, and many, many more. But at the very end of the production line in this laboratory of mine sits a Scienter who is quite unique. Three thousand brains in one. His function is to collect all the data and clarifications written up by the specialist Scienters. When he has collated everything, he is convinced that he has clasped the red rabbit or the essential man entire to his understanding. There you are, you can see him from here,' he ended, with a sign to one of his assistants who brought me a pair of binoculars. I put them to my eyes and, indeed, at the far end of the gallery, I saw the Omniscienter. There he was, an enormous cranial dome with a tiny, shapeless, crumpled face, which seemed to me to be hanging by the ears from the two ebony knobs on the back of a raised throne. Swinging to and fro beneath this head was a little cloth puppet which dangled its empty trouser legs over the crimson plush seat. His tiny right arm was kept aloft by means of a wire, and the index finger rested on his temple in the gesture of one who knows. Above the throne ran a banner bearing this inscription: I KNOW EVERYTHING, BUT I DON'T UNDERSTAND ANY OF IT

Tomemos el ejemplo de los estudiantes de economía. Numerosas investigaciones han demostrado que estos estudiantes tienden a ser menos cooperativos y más egoístas en los experimentos de laboratorio.[311] Aunque existe evidencia de que parte de este resultado se deriva de un “efecto de selección” del curso de economía, que tiende a atraer a personas menos “prosociales,” esto no significa necesariamente que los estudiantes de economía tengan una moralidad intrínsecamente peor que los otros seres humanos. De hecho, estos trabajos también muestran que los alumnos están sujetos a un fuerte “efecto de adoctrinamiento” durante su curso, siendo enseñados que el comportamiento del homo economicus es un modelo apropiado que debe ser emulado por personas racionales (como ejemplo, es habitual para los estudiantes tomar exámenes en los que la respuesta “correcta” de las cuestiones es aquella que maximiza su ganancia personal). El mayor problema con el concepto del homo economicus, sin embargo, es que se trata simplemente de una idea equivocada sobre la naturaleza humana.[312] A lo largo de decenas de miles de años de nuestra evolución, hemos desarrollado un sentido interno de moralidad que nos permitió vivir y trabajar en grupos altamente cohesivos. Esto solo sucedió porque la mejor

La organización excesiva transforma a los hombres y mujeres en autómatas, sofoca el espíritu creador y suprime la misma posibilidad de la libertad.

Many network theorists note that human beings differ dramatically from the rational profit maximizer of social science theory. Neuroscientists exploring different regions if the brain, sociologists mapping an increasingly networked society, and entrepreneurial enthusiasts of the sharing economy challenge the highly individualist conception of the individual that many economists embrace. Instead of homo economicus, let s consider homo sociologicus, a person driven as much by the desire to belong and connect as by her individual goals.

It is commonplace to note that the Homo economicus model, so defi ned, does not accurately describe human agents. Like Homo economicus, we have preferences. Unlike Homo economicus, we have preferences directly relating to the welfare of others. Some may regard this as controversial. Psychological egoism is the thesis that all human behavior is purely self-regarding. Responding to obvious counterexamples, defenders of psychological egoism sometimes say we act in apparently other-regarding ways only because we reap “psychic” rewards from helping others. As philosophers well know, psychological egoism thus embellished becomes airtight at a cost of becoming literally inconsequential. It does not tell us that soldiers will never give their lives for their countries or that people will never make anonymous donations to charity. It does not predict that Ebenezer Scrooge will never buy Bob Cratchit a Christmas turkey. It offers no testable predictions. Instead, it avoids having false implications by having no implications whatsoever. It merely expresses a determination to stretch the concept of self-regard as far as necessary to fi t all behavior, no matter how diverse observed behavior actually turns out to be. Insofar as there is any real content to the claim that we get psychic rewards from helping others, we can admit that, of course, we tend to feel good about helping others. But this fact does not begin to suggest that our real objective is psychic benefit rather than other people’s welfare. On the contrary, there can be no psychic reward for helping others unless we care about others. Imagine Bob helping someone across the street and then saying to her, “Other things equal, I would rather you had been hit by a bus. Unfortunately, helping you is the price I have to pay in order to reap psychic rewards.” The fact that we get psychic rewards from helping others proves we are directly concerned with the welfare of others. The mark of a purely self-regarding person is not that he really wants to help others but rather that he really doesn’t. That is the obvious and much celebrated difference between Homo economicus and us.

Think of how striking this is. The poor in these studies behave more “rationally.” They are closer in this case to the rational economic ideal, closer to homo economicus. This not only tells us something about poverty; it also tells us something about behavioral economics. That money is valued in relative terms is considered a classic finding in behavioral economics: presumably something that characterizes everyone’s thinking. Yet here we see that scarcity overturns—or at the very least waters down—this classic finding. In fact, scarcity alters many other findings as well.

We have lived for too long in the dreary region of homo economicus, our lives shadowed by principles of self-interest, utilitarian 'necessities,' instrumental moralities. But we are permitted to hope; to revive those great and optimistic words of Breton: 'Perhaps the imagination is on the verge of recovering its rights.' We must welcome, as did the Surrealists, the re-entry into modern life of homo ludens, the imaginative man at play, the intuitive visionary.

L'homo technicus-economicus croit aussi, à sa manière, se suffire à lui-même. Arrogant, démiurge, autosatisfait, il se frotte les mains, dispose de tout ce qu'offre la planète, s'arroge tous les droits, ignore ses devoirs, coupe les liens qui le relient aux autres humains, à la nature, à l'histoire et au cosmos. Il pousse si loin l'émancipation qu'il court le risque de déchirer tous les fils et de décrocher, de se décrocher, de s'auto-expulser de la création. Son idéologie est si simpliste que n'importe quel fondamentalisme religieux apparaît en comparaison subtil et pluriel. Un seul précepte, une seule loi, un seul paramètre, un seul étalon : le rendement ! Qui dit mieux dans la trivialité criminelle d'un ordre unique ? Comment ne pas voir que chaque subside retiré à la culture et à l'éducation devra être multiplié par cent pour renflouer les services médicaux, l'aide sociale et la sécurité policière ? Car sans connaissances, sans vision et sans fertilité imaginaire, toute société sombre tôt ou tard dans le non-sens et l'agression. Il existe à ce jeu macabre un puissant contre-poison. A portée de la main, à tout instant : c'est la gratitude. Elle seule suspend notre course avide. Elle seule donne accès à une abondance sans rivage. Elle révèle que tout est don et qui plus est : don immérité. Non parce que nous en serions, selon une optique moralisante, indignes, mais parce que notre mérite ne sera jamais assez grand pour contrebalancer la générosité de la vie ! (p. 13-14)

La alternabilidad entre derecha e izquierda es un principio subversivo. Este principio en lo político es llevado adelante gradualmente por gobiernos de derecha e izquierda en contubernio. Primero la derecha liberal toma el gobierno y economiza a la comunidad, después la izquierda sube al poder y utiliza esta economización del hombre para poder despojarle de toda visión trascendente rebajándole a una condición vegetativa. Así, lo que la derecha no alcanza a subvertir, se lo deja a la izquierda, y viceversa, hasta esclavizar por completo al homo economicus en pos de la corrección política al servicio de la sinarquía internacional.

I don't believe that humans can be reduced to homo economicus, but as a group, government officials are remarkably sensitive to financial, political, and reputational costs. Thus, when new technologies appear to reduce the costs of using lethal force, their threshold for deciding to use lethal force correspondingly drops. If killing a suspected terrorist in Yemen or Somalia or Libya will endanger expensive manned aircraft, the lives of U.S. troops, and/or the lives of many innocent civilians, officials will reserve such killings for situations of extreme urgency and gravity (stopping another 9/11, getting Osama bin Laden). But if all that appears to be at risk is a an easily replaceable drone, officials will be tempted to use lethal force more and more casually.

In the creative minority, it manifests itself in two ways: the first is homo economicus, a worship of utilitarianism—and here we are on very familiar territory in the mould of Carlyle—and the second is in a withdrawal of artistic types into snobbishness, obscure high-brow tastes, art for art’s sake, and other such affected attitudes that cut them off from the plebs.

Homo Economicus, tabiatın yarattığı değil liberalizmle marksizmin icat ettiği bir şeydir. Beşeri varlık sadece istihsal ve istihlâk için yaratılmamıştır. Daha tekamülünün başlangıcında, güzelliğe karşı sevgi, dine karşı hürmet göstermiş, entelektüel bir tecessüse, yaratıcı bir muhayyileye, kendisini feragate sevkeden bir duyguya sahip olduğunu ve içinde kahraman bir ruh taşıdığınıı ispat etmiştir. Binaenaleyh insanın yalnız ekonomik faaliyetini tanımak onu diğer kısımlardan tecrit etmektir. Demek ki liberalizm ve marksizm, her ikisi de tabiatın esas temayüllerine tecavüz etmektedirler.

This doesn’t sound much like the rational profit maximizers that economists make us out to be. Traditional economic models don’t consider the human sense of fairness, even though it demonstrably affects economic decisions. They also ignore human emotions in general, even though the brain of Homo economicus barely distinguishes sex from money. Advertisers know this all too well, which is why they often pair expensive items, such as cars or watches, with attractive women. But economists prefer to imagine a hypothetical world driven by market forces and rational choice rooted in self-interest. This world does fit some members of the human race, who act purely selfishly and take advantage of others without compunction. In most experiments, however, such people are in the minority. The majority is altruistic, cooperative, sensitive to fairness, and oriented toward community goals. The level of trust and cooperation among them exceeds predictions from economic models.

Three American business school professors decided to find out. In a first-of-its-kind study, they analyzed more than 26,000 earnings calls from more than 2,100 public companies over six and a half years using linguistic algorithms similar to the ones employed in the Twitter study. They examined whether the time of day influenced the emotional tenor of these critical conversations—and, as a consequence, perhaps even the price of the company’s stock. Calls held first thing in the morning turned out to be reasonably upbeat and positive. But as the day progressed, the “tone grew more negative and less resolute.” Around lunchtime, mood rebounded slightly, probably because call participants recharged their mental and emotional batteries, the professors conjectured. But in the afternoon, negativity deepened again, with mood recovering only after the market’s closing bell. Moreover, this pattern held “even after controlling for factors such as industry norms, financial distress, growth opportunities, and the news that companies were reporting.”8 In other words, even when the researchers factored in economic news (a slowdown in China that hindered a company’s exports) or firm fundamentals (a company that reported abysmal quarterly earnings), afternoon calls “were more negative, irritable, and combative” than morning calls.9 Perhaps more important, especially for investors, the time of the call and the subsequent mood it engendered influenced companies’ stock prices. Shares declined in response to negative tone—again, even after adjusting for actual good news or bad news—“leading to temporary stock mispricing for firms hosting earnings calls later in the day.” While the share prices eventually righted themselves, these results are remarkable. As the researchers note, “call participants represent the near embodiment of the idealized homo economicus.” Both the analysts and the executives know the stakes. It’s not merely the people on the call who are listening. It’s the entire market. The wrong word, a clumsy answer, or an unconvincing response can send a stock’s price spiraling downward, imperiling the company’s prospects and the executives’ paychecks. These hardheaded businesspeople have every incentive to act rationally, and I’m sure they believe they do. But economic rationality is no match for a biological clock forged during a few million years of evolution. Even “sophisticated economic agents acting in real and highly incentivized settings are influenced by diurnal rhythms in the performance of their professional duties.

Homo economicus may be the smallest unit of analysis in economic theory—equivalent to the atom in Newton’s physics—but, just like an atom, his composition has profound consequences.

Enter, therefore, a new and ingenious variant of Ultimatum, this one called Dictator. Once again, a small pool of money is divided between two people. But in this case, only one person gets to make a decision. (Thus the name: the “dictator” is the only player who matters.) The original Dictator experiment went like this. Annika was given $20 and told she could split the money with some anonymous Zelda in one of two ways: (1) right down the middle, with each person getting $10; or (2) with Annika keeping $18 and giving Zelda just $2. Dictator was brilliant in its simplicity. As a one-shot game between two anonymous parties, it seemed to strip out all the complicating factors of real-world altruism. Generosity could not be rewarded, nor could selfishness be punished, because the second player (the one who wasn’t the dictator) had no recourse to punish the dictator if the dictator acted selfishly. The anonymity, meanwhile, eliminated whatever personal feeling the donor might have for the recipient. The typical American, for instance, is bound to feel different toward the victims of Hurricane Katrina than the victims of a Chinese earthquake or an African drought. She is also likely to feel different about a hurricane victim and an AIDS victim. So the Dictator game seemed to go straight to the core of our altruistic impulse. How would you play it? Imagine that you’re the dictator, faced with the choice of giving away half of your $20 or giving just $2. The odds are you would . . . divide the money evenly. That’s what three of every four participants did in the first Dictator experiments. Amazing! Dictator and Ultimatum yielded such compelling results that the games soon caught fire in the academic community. They were conducted hundreds of times in myriad versions and settings, by economists as well as psychologists, sociologists, and anthropologists. In a landmark study published in book form as Foundations of Human Sociality, a group of preeminent scholars traveled the world to test altruism in fifteen small-scale societies, including Tanzanian hunter-gatherers, the Ache Indians of Paraguay, and Mongols and Kazakhs in western Mongolia. As it turns out, it didn’t matter if the experiment was run in western Mongolia or the South Side of Chicago: people gave. By now the game was usually configured so that the dictator could give any amount (from $0 to $20), rather than being limited to the original two options ($2 or $10). Under this construct, people gave on average about $4, or 20 percent of their money. The message couldn’t have been much clearer: human beings indeed seemed to be hardwired for altruism. Not only was this conclusion uplifting—at the very least, it seemed to indicate that Kitty Genovese’s neighbors were nothing but a nasty anomaly—but it rocked the very foundation of traditional economics. “Over the past decade,” Foundations of Human Sociality claimed, “research in experimental economics has emphatically falsified the textbook representation of Homo economicus.

What economists and political scientists today call the “rational choice of individuals,” but what Smith called “the individual pursuit of happiness,” leads according to this view in a mechanical way to general welfare. As Alexander Pope in his Essay on Man put it: “true Self Love and Social are the same.” While this is the foundation of liberal capitalism, Marx’s dialectical materialism is not different in its selection of the economy as the prime mover. In this way the economy becomes the most important purpose of society. Fortunately, the economy has laws of causation, or, at least, that is what economists would like us to believe. Statistics are gathered to provide an objectified view of reality that enables social engineering. The individual and the collective are simultaneously put in an economic framework that is secular not in the sense that it is nonreligious, since individuals can rationally pursue religious ends, but in the sense that a God-given order of society has been replaced by an order that is constantly produced by homo economicus” (p. 41).

Homo Economicus, tabiatın yarattığı değil liberalizmle marksizmin icat ettiği bir şeydir. Beşerî varlık sadece istihsal ve istihlâk için yaratılmamıştır. Daha tekâmülünün başlangıcında, güzelliğe karşı sevgi, dine karşı hürmet göstermiş, entelektüel bir tecessüse, yaratıcı bir muhayyileye, kendisini feragate sevkeden bir duyguya sahip olduğunu ve içinde kahraman bir ruh taşıdığını ispat etmiştir. Binaenaleyh insanın yalnız ekonomik faaliyetini tanımak onu diğer kısımlardan tecrit etmektir. Demek ki liberalizm ve marksizm, her ikisi de tabiatın esas temayüllerine tecavüz etmektedirler.