1 - WHERE ECONOMIC MAN DWELLS

Summary

Let me introduce you to economic man. but, wait, you know him already. He is Scrooge before being reformed by ghosts of past and future times. He is the landlord in Puccini's La Boheme, who has the audacity to ask his poor, unemployed, and fun-seeking artist tenants for the rent due him. He is the banker who pressures a destitute widow to make the due mortgage payment. He is Veblen's predatory businessman of the 1890s, skilled at calculating and at pressuring rivals into submission. He thinks only of himself and, mainly, only of his wealth. He is ridiculed by critics who see him as a caricature of a real person, and who, therefore, drum him out of the human species by reclassifying him as Homo economicus. Yet, he is present within each of us and, more important for these essays, he is alive and well in economics. In this essay, I consider why this is so. First, however, I note the following three points:

1. The task of understanding market processes is different from that of understanding a human being and even from that of understanding issues that are not ordinarily resolved through market processes. Except with respect to human intelligence, economics does not describe a person in a way that might serve the needs of biologists, sociologists, and philosophers. It did not, until fairly recently, give much thought to the workings of institutions other than markets. […]