Homo oeconomicus

Economic man - is it nonsense, or is it really a functional concept? Is the altruist the real "opposite" of the economic man, and is the economic man the boundless self?

Homo oeconomicus - source: stavebni-formu.cz
Homo oeconomicus - source: stavebni-formu.cz

After the previous article "Economics and psychology"Let's look at another area that criticizes the economy -"economic man“, Ie homo oeconomicus.

Almost all criticism ("almost" I write only because I do not dare to say that I know all critics) of this concept follows only from the fact that critics do not know or understand what it is homo economist Yippee.

General idea

What is the general idea of ​​what "homo oeconomicus" is?

Most opponents will say that this is, of course, the concept of a person who is selfish, only looks at his interests, behaves rationally, just to maximize his profit. And such that people are not (at least not all), so the concept is useless.

I will liken the critique of homo oeconomicus to how I would like to criticize the concept of homo sapiens. Then I would (according to the above pattern) say that homo sapiens is useless, because then one should be reasonable, but a bunch of people are completely stupid and therefore the concept does not apply and is useless.

Reality

However, the reality is completely different. I may shock many opponents with this, but: the universal form of homo oeconomicus does not exist!

If there are 6 billion people in the world, there are 6 billion in the world homo oeconomicus. What makes a person economic is precisely economic is not the content of his actions, but the way of his actions. This difference can lead us to seeming paradoxes of mammoth proportions.

One of those apparent paradoxes is that the very often stated contradiction to homo oeconomicus, homo reciprocans, that is, the classical altruist, he is also an economic man.

The economist is not interested in whether the individual prefers to give up for others, likes to help, gives money to charity, or whether he wants to keep everything to himself, does not like to share and so on. That's it the content of negatiations, which is completely irrelevant to the economy.

This the content of the meeting is completely individual and its study is certainly extremely complex, difficult, and perhaps even impossible (in the sense of "it is impossible to know completely"). The content of the meeting is based on unique, individual preferences of the individual. Not only are these preferences (and thus the content of the negotiations) different for each person separately, they are also different in one individual at a time.

Surely you have other preferences after a three-course lunch and after a week of hunger strike. It is likely that you will have different preferences in 17 and 60.

What interests economics is course of action. If someone is satisfied with giving half of his salary to poor children in Africa, and if that person does, that person has behaved like a typical economic person, because he has satisfied his need. If he doesn't do it because he has little money, again, he behaved like a typical economic person, because he maximized his benefit again - within a certain budget constraint, he would probably be less satisfied if he sent the money.

Interesting, isn't it? One situation, two possible solutions and behold - in both cases the individual behaved as a typical homo oeconomicus. Economic laws also apply to this individual.

Imagine a doctor going to Haiti to help after an earthquake. Financial evaluation is low, why is it going there? Is this proof that the individual is not an "economic man"?

When the doctor returns from Haiti, journalists ask him why he went there. For example, the doctor will answer: "I couldn't watch the misfortune on TV" or "I knew I would need more there than here" or "My wife and I had a beautiful holiday, but I couldn't sunbathe by the sea if I knew that people are suffering elsewhere. "

This doctor is a clear case of an economic person - he just has different preferences than you. It also calculates Cost and Revenue - Just as cost and revenue takes something different than you would take because cost and revenue are subjective.

If the costs and revenues of things are subjective, based on unique preferences, it automatically also means that i profit is a completely subjective matter.

So if you ask why you don't see any "homo oeconomicus" around you, because you move among environmentalists, people working in charity or care, the answer is simple: you don't see them because they have different preferences than yours or what should have "your typical homo oeconomicus" determined by the content of the meeting. However, such a determination is completely wrong and pointless.

Not "what", but "how"!

Homo oeconomicus is thus not determined by what he does, but by how he acts. Often a person calculates his feelings, experiences, different expectations, family or his fear and joy. There is no reason to say that this is not the case, there is no reason to say that it is "not right". What an individual includes in the calculation is a subjective thing, built on the basis of individual preferences.

To say that someone is not an "economic person" because he behaves "differently" is like saying that a modern clock without a dial is not a clock because it does not have numbers. On the same basis, crashing the whole economy is the same as evaluating typography as a field based on the content of the book.

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