Homo economicus

Homo economicus is a Latin expression that refers to a model of human behavior used in economics. Thus, the economic man is a rational person, who maximizes his utility, trying to obtain the greatest benefits with minimal effort.

That is, the concept of homo economicu s, which was first used in the nineteenth century by economist John Stuart Mill, is what explains for certain approaches to economics the behaviors that occur in human society.

This economic homo , which is considered to be universal and timeless (it was yesterday, it is given today and will be given tomorrow anywhere on the planet and under any political system). This, assuming you have perfect information about reality, moves for your personal interest and calculates and ponders the possibilities with total rationality to achieve your own prosperity.

It is understood from these currents of thought, that the sum of individual interests coincides with the social interest. Therefore, the sum of individual prosperities would be equal to the prosperity of society.

It must be said that this concept has received and receives criticism for being a very simple assumption since the homo economicu s only bases its decisions to the extent that they affect to a greater or lesser extent its function of personal utility. And, therefore, it is denied that the human being considers in his decisions the welfare of others and that of the planet itself. That is, it is denied that decisions are affected by environmental and emotional factors, such as affection, gratitude, love, justice … unless this suits the individual.

Alternatives to homo economicus

Some of the alternatives presented to the homo economicus are models based on cooperation, in pursuit of a common and not in the individual pursuit of advantages, such as being moral economy.

Others argue that we are only partially rational, as in the bounded rationality model. Likewise, other branches such as behavioral finance  claim that we do not always act rationally because we are also emotional.

by Abdullah Sam
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