Homo economicus, or Economic human, is the concept in traditional economic theories of humans as rational, predictable agents whose focus is narrow self-interest. This theory stands in contrast to the alternative theories such as Homo donans (the title of a book by gift economy theorist, Genevieve Vaughn) or Homo altruisticus (foundational to Altruistic Economics) which states that human beings are primarily motivated by the desire to cooperative, to improve their relationships with others and the world around them.
Homo economicus is
- Perfectly Informed - about prices, supply and demand
- Rational - behaves to maximise expected utility as defined by economists' axioms
- Labour Averse - disinclined to do any work unless paid to
- Self-interested - indifferent to the welfare of others
- Amoral - without a conscience or other unmodeled value sets
Economists rarely suggest that Homo economicus is an accurate description of real people, but claim it as a mathematically expedient simplification of human behaviour. Nevertheless, the deviation of people's behavior from the Homo economicus model has been used to motivate campaigns promoting 'economic literacy'.
The model is easily disprovable by simple behavioral economics experiments. It has been criticised by gift economy advocates as being something of a self-fulfilling prophecy; if you expect the worst of people, it is hardly likely to encourage responsible behaviour. Traditional economists have produced modifications of Homo economicus which relax some of these assumptions. Nevertheless, such criticism remains on the fringes of the economics establishment and few if any high profile economists have been suggested a radical re-thinking such as would be necessary for a theory of a gift economy.
- Myth: Homo economicus is a valid assumption of human behavior, critiques of Homo economicus
- AE604 Why we Need A New Economic System, which critiques Homo economicus and posits an alternative model, Homo altruisticus
- The Corporation, a film/book about the psychopathic nature of the corporation, derived from its embodiment of Homo economicus
- Homo economicus from Wikipedia