Tuesday, January 07, 2020

Homo Economicus

An article 'How Economists Tricked Us Into Thinking Capitalism Works' by Robert R. Raymond has many insightful observations.

"...There are many who actually believe, wholeheartedly, that markets are the most efficient and even the most ethical way to run a society... Homo sapiens are actually Homo economicus, the theory goes: selfish, competitive, rational agents who are all constantly seeking to efficiently maximize their own personal well-being... By its nature, the market encourages competition and efficiency, and thus, by relying on the self-maximizing behavior of individuals, market capitalism is the only economic system that truly accepts human nature for what it is...
...It’s a fascinating theory. The only thing is, it’s completely wrong. The foundation of this theory relies on an assumption about human nature that has been discredited over and over by research across multiple scientific disciplines. It turns out that Homo economicus is a fairytale, an outdated misconception, a gross distortion of reality.
Yet, it still serves as the theoretical foundation of our entire economic system...Instead, most humans are marked by a deep capacity for reciprocity, cooperation and selflessness."

The article explains that:
 "...we’ve been forced to internalize the idea that we are a selfish, competitive and greedy species. Well, that’s just human nature, we’ll acquiesce when we hear about the profiteering of pharmaceutical companies or the greed of investment bankers. But the thing this, that’s not human nature — it’s just what we’ve been coerced into thinking by an unfeeling economic system that dominates every facet of our life. And in many ways, Homo economicus is a self-fulfilling prophecy..."

The author reminds readers that:
"...Over a century ago, the anarchist theorist Peter Kropotkin wrote convincingly on how the survival of our species has depended more on cooperation than on the heroic efforts of isolated individuals. It certainly is difficult imagining an early human taking down a woolly mammoth without engaging in highly coordinated prosocial behavior. How else could the human species evolve to dominate the globe if not by cooperating with one another to overcome the many challenges our species faced?"

He cites a book 'A Paradise Built in Hell,' Rebecca Solnit which studied disasters:
“In the wake of an earthquake, a bombing, or a major storm, most people are altruistic, urgently engaged in caring for themselves and those around them, strangers and neighbors as well as friends and loved ones,” Solnit writes. “Decades of meticulous sociological research on behavior in disasters, from the bombings of World War II to floods, tornadoes, earthquakes, and storms across the continent and around the world, have demonstrated this.”

Although his intentions are good, Raymond misses following through to the right solution. He is an advocate of cooperatives yet does not realise this remains sectional ownership which still incorporates competition between enterprises. He continues to hold that the State is a form of "the Commons" rather than as Marx recognised the “executive committee” of the ruling class and the expression of "collective capitalism."

Despite these failings, Raymond, nevertheless, highlights the social relationships that exist between individuals and communities.  

No comments: