Homo Economicus: Bringing Out the Worst in all of Us

by Homo Economics himself and Debbie Notkin

I was asked to write about complexity economics, which is funny, because I am the world-renowned face of simple economics … and yet I am the structure on which this complexity relies. Kate Raworth, in Doughnut Economics, calls me “the most influential portrait … the protagonist in every economics textbook.” She says I influence policy-making worldwide, I shape the way we talk about ourselves, and I wordlessly tell people how to behave. I also like doughnuts.

I am, of course, rational economic man, also known as homo economicus. Mainstream economists love me; they believe that everyone aspires to be me and they’ve gone a long way to convince people that they’re right. I was more or less invented by Adam Smith, at right around the time the United States was declaring its independence from Great Britain. I was further defined by John Stuart Mill, whose critics named me in the late 19th century.

So I’ve had 220 years to build my brand and I’ve done the world-class job I’d expect. I have faced a lot of resistance: humans are messy and complex, and even the best of them are imperfect at following my simple credo. Whatever I do, too many of them keep on caring about irrational things—love, community, compassion, even joy. 

Of course, anyone as powerful as I am develops enemies over the years. Not being alive insulates me from death threats; not having a home insulates me from protesters on my doorstep. So my detractors confine themselves to boring tomes, TED talks, and YouTube videos.  Although it may not be a perfectly rational choice, I can’t help reading some of what they say. David Graeber, in Debt: The First 5,000 Years, said:

What history actually reveals, though, is that while humans may be justly accused of having a proclivity to accuse others of acting like conquistadors, few really act this way themselves. Even for the most ambitious of us, our dreams are more like Sindbad’s: to have adventures, to acquire the means to settle down and live an enjoyable life, and then, to enjoy it.

Graeber may not be completely wrong, but he doesn’t understand just how well I have exploited the proclivity he identifies. It turns out that when I keep telling people they should be like me, and especially when I have teachers and professors and pundits boosting my signal, they believe it … and they become more like me. I have turned many mediocre men into conquistadors in my time. 

Kate Raworth, having praised me so highly, seems intent on tearing me down (and where are my doughnuts?). She cites studies which demonstrate that students of economics are less generous, less charitable, and more immediately self-interested than students in other disciplines; now that’s success. She also claims that just the use of my favorite words, like “profit” and “costs” and “growth” can be shown to reduce empathy and encourage an interest in wealth accumulation. More success.  

My enemies claim that I am incomplete (did I ever deny it?), that I misrepresent human behavior (yes, but I’m working to change that), and that I am culturally monolithic (oh, those myths of kinder, gentler humans who are someplace else than where we are). They point their fingers and call me a backbone of capitalism – an “accusation” I embrace. 

People try to supplant me and rename me. They try to prove that I’m not real – I know that. I also know that if they ever succeed in replacing me, or even minimizing my power, everything will change. But I don’t like thinking about that – and I’m not making any money by writing this essay, so I’m going to go buy my own doughnuts. With chocolate icing.

***

Debbie: Now that he’s off his soapbox, let me link this to complexity economics. As long as the mostly white mostly men who run the political and economic world believe in rational economic man, they will continue as they have been. Here are two of their strategies:

First, the complexity piece: the men at the top will continue to turn their eyes away from the mechanisms and systems which keep them on the top of the heap. Those are chores for lesser beings: billionaires and bank CEOs and economic advisors to heads of state don’t know how the computers are programmed, how the bits and bytes move around the globe, how the super-fast traders can gain – and game – their 1000th of a second advantage. 

Privilege makes you stupid, because it gives you easy ways to avoid learning things you should know. Privilege means that you don’t have to mind the store (or sports team or bank or multibillion dollar corporation) that you run—you pay people for that, and never as much as you are making. When the people at the top aren’t minding the store, no one is—the people doing the work are adding workarounds and bandaids and kludgy systems onto already worked around and bandaged and clunky systems. Often literally no one knows how a given system works, let alone how these mysterious systems talk to each other. So when one of the systems collapses beyond the point where it can be fixed by an additional complexity, the dominos can start to fall. 

Second, the simple piece: they will go on encouraging the rest of us to believe that we, individually, are motivated primarily  by self-interest and greed … and that when we don’t act that way, we are failures. They will continue to reward the people who mock and disparage any and all actions which are not directly self-serving, to promote the prosperity gospel, and to scorn anyone who has less material wealth than we have.

They have spent centuries expecting us – doing their best to require us – to be our worst selves. The goal of rational economic man results in the person who will sell their grandmother for cash, vote for lower taxes instead of health care to keep them alive, choose their mate(s) by how much money they can be expected to make and prioritize scams and schemes over community and connection. The lonely, opiate-tempted cynics of the early 21st century are the inevitable result of lionizing rational economic man, of building what Max Haiven, in Revenge Capitalism: The Ghosts of Empire, the Demons of Capital, and the Settling of Unpayable Debts, describes as “a society which seeks to recode all relationships as risks, and where we are taught to imagine everything of value as an asset to be leveraged.”

If we look to the theorists of happiness like Rutger Bregman, the believers in reclaiming our bonds to each other like Brené Brown, the believers in the power of communal struggle like Adrienne Maree Brown and Silvia Federici, we can shrink rational economic man down to the size he deserves – a small jagged piece of human decision-making in a brightly-colored jigsaw puzzle of options.  To have the lives we deserve, we need the icons that celebrate our variety. And doughnuts.

2 thoughts on “Homo Economicus: Bringing Out the Worst in all of Us

  1. This is the most brilliant take down of Homo Economicus I have ever read. You make it so obvious why this narrow idea doesn’t work and also give us a path forward by pointing out that just how far it diverges from true human nature. We are social and we take care of each other. Of course, sometimes we are selfish as well, but we do not make all our economic decisions that way, nor are selfish decisions the most rational ones. And once we start bringing in all the aspects of human beings as we really are, we must apply complexity thinking to get anywhere, because there’s nothing simple about people.

    Like

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