ABSTRACT
Stable interests Homo economicus – like real individuals, according to economics – has stable interests and preferences, and these have a utility function. His or her stable interest and motivation is to maximise his or her own expected utility based on limited resources (Folmer, 2009, 258). Homo economicus aspires to be perfectly informed, and uses this information for satisfying his or her stable interests. Economists and many non-economists describe such an (illusory) individual as rational, as if it would be rational to behave in this individualist, consciously, and purposefully self-interested manner, concerning manifest interests. There is something admirable in that traditional economics attempts to grasp humans and society in this elegant way in order to at least try to predict economic and social behaviour, as described in textbooks in economics (MasColell, Whinston, & Green, 2006). Moreover, we should not forget that the notion of Homo economicus and his economic rationality was developed to describe human behaviour at the aggregate level of many humans in society, not to describe and predict the behaviour of single individuals. Still, although the Homo economicus perspective is certainly elegant and rigorous, enormous amounts of criticism have been thrown at this view of human interests. Its crude abstraction of human and social life, the critique contends, entails limited potential for explaining and predicting human action and social development. Thus, it is, according to the critique, of as limited value for understanding humans and society as it is for policy (Rol, 2008). At the same time, as in many caricatures, there seem to be certain grains of truth when using Homo economicus to describe an influential part of how economists understand human interests. One part is ‘conservative’ (in a wider sense than in narrow party politics), and another part points towards the great dynamics of human decision making. The conservative message is that we should not expect humans to change their nature. Humans will always be what they have always been. Moreover, according to traditional economics, people are highly dependent on external stimuli, often regarding incentives and disincentives. History has been replete with economic and social thinkers who argue for making sure that the poor be kept poor. If not, the poor would not work (since
people these scholars assume, tend to be passive unless incentives and disincentives stimulate them to be active). To make the poor better off would be bad not just for the affluent parts of society but also for the poor people themselves. These thinkers conclude that it is fair to favour continuity where the poor remain poor. It is fully understandable that many economic thinkers a couple of centuries ago are worried about laziness and passivity, in times when the rich consist of nobilities who have as their rule of life not to work, and to expose that they do not need to work. It is logical that these thinkers assume that if workers be better off, they will refuse to work to any serious extent (Manderville, 1714/1989). Extra incentives that are provided for particularly hard work run the risk of creating economic and social mobility (upward), which back in those days are seen as inadvisable. Today, the mainstream view in economics is, of course, that people who work particularly hard should be financially rewarded. At the same time, the view among economists of humans as economically rational contends that the level of material incentives and disincentives to employees as well as to employers have huge consequences for their interests in working hard to provide for themselves. By extension, this selfishness and propensity for laziness – unless (usually material) incentives are sufficient – is highly relevant to the welfare of society as a whole. That a certain degree of unemployment is healthy for the economy can sometimes be heard, the argument contending that a degree of job insecurity may energise and strengthen people’s motivation to work hard. That hungry wolves hunt best might be seen as common wisdom in many work environments, at all socio-economic levels. Even if economics, like most other disciplines, is represented by people of several political colours, its general message is that no society can be expected to handle successfully societal problems without taking into account, and making use of, what economists perceive as (genetically hardwired) stable human receptivity to material or other Apollonian incentives and disincentives. This notion is core to the view in economics about the economic rationality of individuals and organisations. It is futile to try to bring about an entirely different society where humans are changed into becoming uninterested in material incentives and disincentives, and instead intrinsically motivated to do only beneficial things to the world. However, society can do something else. Since a stable trait of humans is to be highly receptive to incentives and disincentives, and since people have a fundamental interest in actively improving their own lives, financial carrots and sticks are the keys to improvements of society. Through economic instruments, society can help people voluntarily enrich their lives and channellise human selfishness into the strengthening of the common good. Economics embeds both a strong view of stable human interests, and of a human susceptibility to stimuli that can help individuals and society become authoritative agents constantly making active, voluntary choices.
