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Neoclassical Neanderthals in Economics

3p Contributor | Tuesday October 11th, 2011 | 0 Comments


3p is proud to partner with the Presidio Graduate School’s Macroeconomics course on a blogging series about “the economics of sustainability.” This post is part of that series. To follow along, please click here.

By Maggie Winslow

Neoclassical economics envisions a Homo Economicus who is, among other things, independent, selfish, and self-centered.  The selfish acts of these Homo Economici together lead to a rational and optimal outcome for society as a whole.  Each person acting to maximize his or her outcome will end up benefiting society as a whole. The average person acting in his own best interest will purchase best goods for the price. Efficient industries and producers are then promoted, and to maximize profits, these efficient firms produce goods in the most cost effective manner possible.

Behavioral Economists have found that people are not as selfish or as rational as neoclassical economics suggests, that altruism is real, and that people often think of others in their purchasing and production decisions.    Many of us can verify this from our own personal experiences.

Recent discoveries about Neanderthals confirm that they were larger, stronger, more resilient than Homo Sapiens but Homo Sapiens out-competed Neanderthals (after a bout of interbreeding).  How and why did this happen?  DNA testing is still looking for clues about what makes us different from Neanderthals.   One likely theory is that Neanderthals did not work together.  They were self-focused rather than community focused. Humans have worked together since early on, as ancient temples can attest.  Our ability to work together towards common goals has allowed us to dominate other species on Earth (at least for now).  Imagining a Homo Economicus who is selfish and self-centered is to deny a fundamental human characteristic that has allowed us to thrive.    The success and ‘sustainability’ of our species depends on our culture (shared language, values, norms, institutions, etc.) far more than on any individual, selfish traits.

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