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Sunday, January 30, 2005

Economic man is dead! Long live economic man!

Once again the fundamentals of economic theory have been questioned. I haven't plowed through any more than the abstract, but already I got a bad feeling:
Traditional economic models assume that all individuals share the same self-oriented life perspective. The new economics suggests, on the basis of different methodologies, that this is unlikely. These challenges to traditional economic views of human nature are summarized under four substantive topic areas (trusting, bonding, and empathy;altruism and cooperation, community orientation and accommodation; fairness and reciprocity; and rationality). Laboratory experiments suggest that a majority of us are contingent cooperators, trusting and willing to give others the benefit of a doubt ... at least initially. Very few people are selfish chronic free riders (20%-30%). The rational calculating and absolutely consistent economic man is largely a myth.

(Paper Here)

I don't understand how people interpret Adam Smith's self-interest to equal zero-sum selfishness nor that self-interest necessarily requires free-riding. It is not necessary nor is it part of Smith's (or other great economists') philosophies. Typically these types of arguments against orthodox economic theory are straw-men that have little practical purpose. That doesn't mean the heterodox folks aren't out there...

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