Home Economicus: An Endangered Species
The modern world is full of myths. I’m not talking about Greek legends or medieval lore, but the shared stories and constructs underpinning our beliefs and behaviours. We need myths—they help us understand and feel in control of our world—but when they blind us to reality, they can serve as obstacles to change. As long as I accept, for example, that being richer and thinner will make me happy, I’m not actually likely to find happiness. We may not believe in the pantheon of ancient gods, but many of us still believe in mythical creatures that clearly don’t exist, like the infallible celebrity or the unimpeachable leader.
Homo economicus, the mythical creature of neoliberal economics, is one such persistent presence, despite a thorough debunking by commentators and academics. This bizarre specimen is supremely autonomous, free of social bonds, lacking any emotion and interested only in what will make himself [sic] happy. Homo economicusacts within (and only within) a market full of others like himself, each with equal knowledge and resources, each seeking to maximise financial gain.
Both the actor and the market are completely fictional, yet they still serve as a model for much economic thinking. Behavioural economics, beloved of the current government and a heavy influence on our financial regulators, purports to demonstrate how humans are in reality subject to bias and error. Yet by depicting any deviations from rationality as a form of weakness or susceptibility, the discipline betrays its assumption that calculating self-interest is the ideal.
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