Classical economists have relied on the model of physics to reach predictability, which led them to depict a “rational economic man.” Contemporary studies reveal a very different picture of our economic behavior.
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Disclaimer: This chapter summary is personal work and an invitation to read the book itself for a detailed view of all the author’s ideas.
Early in their search for rationality, classical economists have opted to reduce their quite versatile subject matter—man—to a predictable entity. A series of harsh simplifications were to be made. This is why Stuart Mill (1806-1873) wrote: “[Political economy] does not treat the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging the comparative efficacy of means for obtaining that end.”1 But is there anything real to “Homo Economicus,” as Mill’s critics dubbed his theoretical creation? Answering this question requires retracing the whole story of our economic self-portrait.
- Essays on Some Unsettled Questions of Political Economy, essay 5, paragraphs 38 and 48.