The Homo Economicus Straw Man

by Ryan McMaken

Among the larger albatrosses hanging around the neck of the economics profession is the idea of homo economicus. To this day, most economics undergraduates hear about it in the context of neo-classical economics. Homo economicus, we are told by the neo-classical economists, is the ideal economic man who always seeks to maximize profits and minimize costs. He only acts “rationally,” and rationalism is defined as, well, always seeking to maximize profits and minimize costs. Even worse, “profit” is often assumed to mean “monetary profit” measurable in dollars (or some other currency).

Yes, many economic economists will say “it’s just a model” and note there are many caveats that come with the its use. These protestations are often less than convincing given the use of models based on “rational” behavior. But, for now, let’s just take the the economists at their word. Even if what the defenders of homo economicus say is true, however, the fact remains that the vast majority of sociologists, political scientists, politicians, and journalists never got that memo.

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