Exposing the Myth of Homo Economicus (Book Review of 'Moral Markets: The Critical Role of Values in the Economy')
30 Pages Posted: 31 Jul 2008 Last revised: 24 Apr 2009
Date Written: July 30, 2008
The prevalence of the "homo economicus" model of humanity has crowded out considerations of important noneconomic aspects of human nature - most importantly, the moral dimension of human thought and conduct. As a result, our understanding of the present ills besetting the business world and the market economy is incomplete, and the policy prescriptions flowing therefrom are often suboptimal (if not counterproductive).
This book review situates "Moral Markets" within this larger debate over human nature generally. I show how, through the presentation of biological evidence and evolutionary theory, "Moral Markets" repudiates the "homo economicus" model of humankind, and supports the Aristotelian position that human beings are fundamentally moral creatures by nature.
After demonstrating that free markets cannot thrive in the absence of virtue, "Moral Markets" leaps to the conclusion that free markets must be generally populated by virtuous actors. This book review asks whether another conclusion might be drawn: that the free markets of today lack a critical mass of virtuous actors, hence the current spate of corporate scandals and economic woes.
Keywords: homo economicus, Aristotle, virtue, law and economics, economics, free market, human nature, morality, book review, moral markets
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