Sunday, November 23, 2014

Beyond Homo Economicus

LEIPZIG – Humanity currently faces numerous global challenges, including climate change, resource depletion, financial crisis, deficient education, widespread poverty, and food insecurity. But, despite the devastating consequences implied by a failure to address these issues, we have not risen to the occasion.

Economies, both crisis-stricken and thriving, are failing to eliminate poverty, improve the provision of public services like education, and maintain and allocate collective goods, such as fish stocks and rain forests, effectively and equitably. At the same time, societies are increasingly fragmented, with perceived loneliness and stress-related illnesses on the rise. And existing governance structures are inadequate to improve the situation.

Clearly, a new approach is needed. But developing effective mechanisms for addressing large-scale shared challenges must begin with a fundamental shift in the way human motivation and cognition are understood.

The concept of homo economicus, which asserts that humans are rational actors who make decisions based on narrow self-interest, has dominated political and economic thinking since the 1970’s. But, while the pursuit of self-interest may be advantageous in certain contexts, it is not the only, or even the principal, driver of human behavior – and it is not conducive to overcoming today’s most pressing global issues.

It is time to replace the framework of homo economicus with a model that reflects humans’ capacity for altruism and pro-social behavior. By illuminating opportunities for human cooperation, such a framework would provide a useful foundation for political and economic systems that succeed where existing arrangements have failed.

Achieving such an understanding of human nature requires a comprehensive, interdisciplinary approach that moves beyond the social sciences. In recent years, developments at the frontier of evolutionary biology, psychology, and anthropology, together with the emergence of new fields, such as neuroeconomics, social and affective neuroscience, and contemplative neuroscience, have shown that humans can be motivated by pro-social preferences, like fairness and concern for others’ welfare or rights.

In fact, humans are often driven to help those in need, even complete strangers, by feelings of empathy and compassion. This idea is reinforced by a vast amount of neuroscientific evidence, which contradicts the emphasis on individualism that prevails in Western societies, suggesting instead that the human brain is wired for affective resonance, with people naturally reflecting each other’s emotions and motivational states.

Moreover, experimental data suggest that, contrary to mainstream economic theory, people’s preferences are changeable. Shifting environmental factors shape human decision-making by activating motivational systems related to threat, achievement, and power motivation, as well as to care for others and social affiliation.

The emerging field of contemplative neuroscience has begun to produce evidence for plasticity of pro-social preferences and motivation. Short- and long-term mental-training studies (such as the ReSource project) reveal that mental-training programs can enhance cognitive and socio-affective faculties like attention, compassion, and empathy. More specifically, training programs aimed at boosting pro-social motivation have led to increased activity in neural networks related to positive emotions and affiliation, as well as to reduced stress-relevant hormonal responses and increased immune markers, when participants are exposed to distress in others.

In other words, such mental-training programs make participants more efficient and more focused, while improving their capacity to cope with stress. At the same time, they promote pro-social behavior and a broader, less self-centered perspective that accounts for humans’ interdependence. Such findings have started to inspire fields like experimental microeconomics and neuroeconomics, which, in turn, have begun to incorporate pro-social preferences into their decision-making frameworks.

These promising findings should now be incorporated into new economic models and concrete policy proposals. Given that brains are at their most malleable during childhood, beginning mental training in school would help to create a solid foundation for the kind of secular ethics that would contribute to the development of a more compassionate society. But mental training also has benefits for adults, so businesses, political authorities, and research institutions should collaborate in establishing “mental gymnasiums.”

Furthermore, institutional reform could be aimed at adapting social environments to foster cooperation instead of competition, and to activate our motivation to engage in caring behavior, rather than seeking achievement, power, and status only. In the long run, striving only for the latter leads to imbalance and resource depletion not only on the individual level, but also globally.

Humans are capable of far more than selfishness and materialism. Indeed, we are capable of building sustainable, equitable, and caring political systems, economies, and societies. Rather than continuing to indulge the most destructive drivers of human behavior, global leaders should work to develop systems that encourage individuals to meet their full socio-emotional and cognitive potentials – and, thus, to create a world in which we all want to live.

Copyright: Project Syndicate/Institute for Human Sciences/Global Economic Symposium, 2013.

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    1. CommentedSasha Patino

      "Orthodox economics continually claims that it is a science. Yet it continually ignores the dictates of science. A system of economics that ignored the reality of physics, chemistry, biology would be properly dismissed as quackery. Which is precisely what the orthodox model does. It ignores the culmination of physics, chemistry and biology into the holistic system which is ecology and environmental science.

      We are not 'homo economicus' - rational agents pursuing financial self-interest focused on consumption. We are 'homo ecologicus' - sentient participants pursuing beneficial interests focused on sustainability.

      The goal of an economic system cannot be unsustainable growth based on false financial and materialist assumptions. It must be subservient to the dictates of ecology and the other sciences. The proper goal must (partly) be to demonstrate how to achieve a sustainable equilibrium with our ecosystem to ensure sufficient resources for human development. Any system that does not have this component should be dismissed as quackery. And its practitioners and advocates should be removed from the halls of power. " Posted previously on Facebook.

    2. CommentedFlint O'Neil

      Simple assumptions will take the profession a lot further than realistic assumptions. Homo Economicus is fine. Does Tania Singer really think her insights are more developed than Friedman's? Imagine trying to assess the impacts of every tiny policy that is obvious with Homo Economicus with some realistic model? It would be infinitely more complicated and minutely more accurate

    3. Commentedgeorge mansfield

      Neuroscience has been discovering how our mind Works, but it also gives us the understanding that it is difficult to change how our brains behave. A new man is imposible, that utopia died in 1989, the desire to make a new man created avenues for tyranical goverments. I believe that neuroscience is showing us that civilization can only survive under strong democratic institutions manage under strict meritocratic credentials, something that is very difficult in primate societies where biological and group relationships have a tendecy to flourish if unabated. It is the recognition of this reality of the human condition, and the humility to follow paths that will somehow save us from the usual corruption and banal practices of men encharged of taking care of public affairs all over the world.
      A strong impartial judicial system and relative clean democratic selection of political power is not something that humans in general follow. Only the knowledge that reality will make us change for the better and neuroscience is giving us enough understanding to be able to change people attitudes and give the world a chance.

    4. CommentedJose araujo

      "The whole is greater then the sum off all parts", Homo economicus aknowledges that possibility and in some cases incorporates it in the models (game theory is an example, synergy, extrenalities, etc)

      We don't need to look beyond Homo Economicus, we just need to understand him, what's his interest and what political parties are saying his interests are.

    5. CommentedMark Pitts

      Ms. Singer misses a fundamental point:
      Yes, most people are willing to help total strangers.
      But when forced by the gov't to do so (usually for the purpose of buying votes for the incumbent party), most people rightly reject such "charity."

    6. CommentedJohn McDonald

      The author is poorly informed: "Economies ... are failing to eliminate poverty..."
      According to the World Bank the proportion of households in developing countries living in extreme poverty decreased from 52% in 1980 to 21% in 2010.
      In absolute or percentage terms, this has been the best 30 years for the poor in the history of the world.

    7. CommentedYoshimichi Moriyama

      A very interesting article. I agree neuroscience can shed much light, but come to think of this, what a crazy world we live in that we have to ask Ms. Singer if it is genetically and neurologically all rigth to be altruistic! Neo-liberalism is a social philosophy or an ideology and can be better dealt with by history, sociology and anthropology, etc. than natural science.

    8. CommentedStamatis Kavvadias

      Some interesting points. I do not agree that "mental training" should reach schools before we apply it to an active social context, and find that we broadly love the result. But, such training --“mental gymnasiums” the author calls it-- sounds much like brainwashing.

      If what the author says is true (which I believe), lectures on the subject of solidarity, cooperation, etc. Nevertheless, I really doubt that the mechanisms, to activate "pro-social preferences" in humans, have been studied enough and have substantial results to demonstrate, yet.

      It is most likely that global challenges require us to rise beyond the (undelivered) promise of capitalism's economic determinism that "free markets result in all of us being better off". This notion has not taken into account any degree of inequality, or resources and the environment, and it is clear we need to do much better than aiming for "better off". We need to bring specific achieve global targets above just "better off".

      More importantly, if we do not frame the general notion of growth as ill-suited for the environment and sustainability, ideas in the context the author targets cannot find fertile ground and become main-stream, or even influential.

      When the largest volume of growth is expected from trade and a large volume of that trade is about exchanging the same kind of products among producing countries, without any seasonal shortage but to gain competitive advantage, global and local resources are wasted. Such growth needs to be restricted, and growth should be guided towards increasing (cost-relative) product and service quality and durability.

      Forced by the current monetary system of an interest-bearing money supply, the overarching "necessity" of growth without limitations prevails. This renders all egalitarian and environmental concerns infeasible, and limits the scope of public dialogue about them. The false "necessities" of unconstrained growth and a private-risk based monetary system need to be moderated, if we are to address *or even discuss* sustainability, environmental, and inequality concerns seriously.

        CommentedStamatis Kavvadias

        The rise of public debt globally, in the present economic crisis, has clearly demonstrated that unconstrained private financial risk is not a secure way of managing the economy. It has public sector and global spillover effects. If regulating such risk is hard, we need to also consider seriously the case of moving such risk, or part of it, to accountable democratic institutions, by re-nationalizing creation and allocation of the money supply.

    9. CommentedAsim Rai

      Neo Liberal laws on paper are not erroneous propositions, however the idea of the 'rational man' is. This misunderstanding of what 'man' is can severely lead to a crisis that we just saw in 2008 (and ongoing in different forms). I think Tania Singer is correct in merely voicing that we ought to begin questioning the current economic/political status quo by challenging "the way human motivation and cognition are understood".

      I doubt this questioning will undermine neo-liberal DNA but strengthen it.

    10. CommentedJerry Miller

      We just published a special edition of the Journal of Economic and Behavior Organization (temporarily free access) in which the authors provide their own take on some of the same issues.
      Both the theoretical and empirical data seem to call for a new conceptualization that addresses the human equation as the current model is stretched quite thin on many levels, including the issues you address.

    11. CommentedKir Komrik

      A refreshing take on economics, thank you,

      "Clearly, a new approach is needed."

      There is one and it enables exactly what you've described. Those interested in a long-winded explanation can find it here:

      - kk

    12. CommentedDriss Ezzine de Blas

      Thanks a lot for the evidence presented in the artcile. Nevertheless, it is somehow a proof of the boundary analysis effect we are confronted to, the fact that the author does not mention the work of philosophers such as J.J. Rousseau. In his manuscript called, Speech on the origin of inequity among human beings, in 1755, J.J. Rousseau traces back, using a logical analysis framework -typical in philosophy, the origins of inequity in the "civilsied" world and the main principles driving the primitive humans. These principles where the selfish principle to assure the self-conservation, and the altruistic concern over other humans in situations of danger or suffering. These two principles are in dynamic trade-off, and the prevalence of one over the other is traced back by Rousseau. His conclusion is that the "current" prevalence of competition, individual property, private rights and selfish behaviour is just one of the possible "Homos terraqueus". And the fact that we got to the current situation, the outcome of a series of aleatory facts, among which the creation of property.

      I agree with the author about the importance of neuroscience research, but we shall not forget that a lot of the "hypothesis" we are so enthusiastic to prove, have already been demonstrated theoretically centuries back. We are the victim of a specialized education, that makes the boundary of our opinions too close to recent findings.

      Finding alternatives to current socio-economic and ecological development trends needs an more critical education in schools and in science, tracing back to old findings, in order to better interpret current ones.

    13. CommentedP Jacob

      An excellent and very timely, essential article. Thank you Tania. You are right on the button. You may be interested in this compilation of articles that absolutely validates your refreshing and powerful approach to the new paradigm we are in the midst of and will shift the collective consciousness for planetary survival. A Culture Separated From Nature Cannot Survive

    14. CommentedSth Chn

      This article is hopelessly problematic. First, the fact is neuroscience is a new science. At best, neuroscience is in the Newtonian/classical physics stage of its development. Quite simply, when we acknowledge the enormous complxity of the brian, science currently knows very, very little about it. For someone to suggest that neuroscience provides hard evidence for a specific socio-economic model for the entire human species is absurd. Indeed, the very idea that neuroscience validates or invalidates a social model, political order or any human values at all is nonsensical. To say that we are hard-wired for one way rather another is nonsensical. All human behavior, ideas and values are the results of a brain or brains. Social structures or norms don't somehow lead us astray from some authentic or true hard-wiring because they are the products of a brain as well. I don't write in this in defense of neo-liberalism. I don't know what the answer is to the problems the author lays out. But the answer certainly does not involve neurobollocks. Frank O'Callaghan gets this article just right. It is something, anything, to oppose neo-liberalism, and therefore doesn't need to make sense.

    15. CommentedZsolt Hermann

      Thank you for this beautiful overview article.
      I fully agree.
      The situation is quite simple, evolution is still going on and we as a species have to adapt to the changing circumstances.
      While the self-centered, subjective, self-profit oriented behavior was beneficial, driving human development before, now as we evolved into a globally interconnected and interdependent system the previous behavior has turned self-destructive.
      I also agree that it is very important that the necessary changes are done in a gradual manner, willingly, without any coercion and trickery.
      People need a positive motivation especially as the changes required, to move from a selfish, egoistic inherent behavior towards a mutually altruistic behavior for the sake of the global whole, before self-interest, are vast, almost "supra-natural".
      Such fundamental changes can only be achieved by a clear, transparent, scientific education program with parallel practical implementation, for all ages, gander, nationalities and social layers, so each and every one of us understands what it means to live in a global, integral system and how we can adapt to it in the best, most effective and most pleasant manner.
      We already possess all the information necessary to show that the benefits are unprecedented, beyond a safe and sustainable future and human survival we have the opportunity to enter a completely new dimension and quality of existence, through mutual responsibility and a mutually complementing global cooperation.

    16. CommentedMarc Laventurier

      I'm sure someone, probably some headache-y French intellectual, has come up with some formulation equivalent to the one I happen to have thought up earlier this morning to characterize American capitalism: 'Darwinian by Design'©.

        CommentedMarc Laventurier

        Was Rousseau advocating Dzogchen to realize his own and society's 'natural' mind? See

    17. CommentedAyse Tezcan

      "....fairness and concern for others’ welfare or rights." I remember reading about these concepts in Adam Smith's The Theory of Moral Sentiments! He did believe in these human characteristics; however, the industrial revolution and following modern economics hijacked his invisible hand concept in Welfare of the Nation without considering moral standing that he based this notion. So basically, the greedy people without moral compass made the rest of the society believe that human nature only cared for maximizing the corporate profit...
      Anyways, I am mumbling, but great points. Thank you for writing.