Actually, there is a lot more wrong with it such hypotheses used as assumptions in the construction of homo economicus, and the exportation of homo economicus from theory to practical use.
Lars P. Syll’s Blog
Richard Thaler gets the 2017 ‘Nobel prize’
Lars P. Syll | Professor, Malmo University
Homo economicus is a theoretical construct used to simplify the complexities of human behavior for use in an economic model. But human behavior is not limited to economics other than in quite specialized cases, where it is reasonable to exclude the range of motivation that generally influences the range of behavior.
This has been debated literally for millennia in ethics, for example, and studied in psychology, anthropology, and sociology. The reality is homo socialis rather than homo economics, chiefly motivated by "utility" or "preferences" as material satisfaction, or homo politicus, chiefly motivated by power and dominance, as well as prestige and fame.
Nor are humans motivated only by fame, fortune, power and pleasure. In fact, fame, fortune, power and pleasure have been regarded by the wise as vanity and glamor, veiling the true source of happiness as abiding fulfillment, which lies in purification of the heart. The primary pursuit of fame, fortune, power and pleasure harden the heart and put what all human seek most beyond reach. This is the teaching of the wise.
There is nothing wrong with using simple models like Robinson Crusoe models as long as the limitations are explained. But I recall that when taking Econ 101 the prof just put the model out there without explaining modeling and its use. We were all looking at each other, like WTF?
Lars P. Syll’s Blog
Richard Thaler gets the 2017 ‘Nobel prize’
Lars P. Syll | Professor, Malmo University
"But I recall that when taking Econ 101 the prof just put the model out there without explaining modeling and its use. We were all looking at each other, like WTF?"
ReplyDeleteYes. Or worse: some were naive and inexperienced undergraduate students, that took for granted everything the teacher said.
After all, the teacher is some kind of knowledge authority, who should know better than the eager but yet inexperienced students.
I once believed in the neoliberal opinion that the teacher explained as if it was a fact. I was once trapped in the neoliberal paradigm. And the teacher was also, I cannot blame him.
But eventually some people start to pay attention and experience some events that show all the contradictions in the mainstream economic theory. Unfortunately, they are just a few...