chapter  2
48 Pages

Myths and Misconceptions

Th e most fundamental of such assumptions is ‘economic rationality’, referred to as the pursuit of self-interest. Wholly continuous with the views of Adam Smith, neo-classical economics describes a rational economic person who acts always so as to maximize her self-interest, maximize satisfaction of her wants and pursues her short-term self-interest as a rule (Blaug 1992: 230-32; Marshall 1962: 78-81). Th is depiction of rationality subsumes the classical as well as neo-classical description of rational behaviour as the maximization of utility of a variety of goods, given limited resources. Th e ‘rational’ economic man, homo oeconomicus, is thus primarily ‘a consumer maximising utility’ (Söderbaum 1999: 164), and is solely concerned with his own short-sighted individual interests.