New
Economy
Consumption
ECONOMIC MAN
Economic theory considers a person as an economic person, that is, acting in accordance with the "requirements" of economic theory. Modern neoclassical economics is based on three postulates:
# People have rational preferences between outcomes that can be identified and associated with values.
# Individuals maximize utility, while firms maximize profits.
# People act independently, relying on complete and up-to-date information.
In connection with the fact that all economic relations of all economic entities are reduced, ultimately, to the consumption of goods and services, it can be argued that the entire economic theory is built on the concept of an Economic Man. So who is he, this Economic person, who defines each of us in Economic Theory.
An economic person is a rationally thinking subject who consistently subordinates his plans and actions exclusively to obtaining his maximum benefit. In the neoclassical economic theory of the present time, such behavior is accepted as a general norm, assuming that each participant in economic life chooses such decisions that bring him the greatest income, benefit, benefit. Although such an egoistic type of behavior is quite common among people, but they are by no means the majority, and even more so, it is rash to say that ALL purchases, even of such people, are rational. Most people behave in a completely irrational manner, and often impulsively, without thinking about the consequences, and sometimes even to their own detriment. Even more often people act out of habit, not trying to use every opportunity to improve their situation. Most people follow established customs or rules in their actions without regard for considerations of personal gain, including in their acquisitions. The tendency of economists to replace a real person with a conventional Economic person has become the reason for criticizing the objectivity and fundamental nature of economic theory.
Criticism of the use of the concept of Economic man, gives an awareness of the importance of behavioral prerequisites in Economic theory. It becomes clear that economics as a science (precisely as a science) is possible only if there is an Economic person and certainty in his behavior, otherwise, when a person's behavior is arbitrary, the economy becomes UNPredictable. Criticism of the principle of the Economic Man gave rise to a scientific discussion in which his existence began to be interpreted as a reasonable theoretical premise. Some scholars insisted that we are talking about a premise that is actually true in relation to mass economic behavior, that is, on the average and at the generalized level. Others emphasized the methodological side of the matter, believing that the Economic Man is nothing more than a convenient analytical abstraction. They consider a person in the economy "only as a being who wants to have wealth and is able to compare the effectiveness of different means to achieve this goal." An important consequence of this approach in the discussion was the understanding that there is a certain gap between theory and practice, and in the practical use of scientific conclusions, it is necessary to take into account the influence of those factors that economic theory ignores.
The interests of the adequacy of the Economic theory require a new definition of the Economic person with the introduction of additional behavioral characteristics into the theory. But even in this case, in order to obtain reliable economic indicators, it is necessary that the Economic person, be he an egoist and altruist, be constant in his behavior and in his choice, be consistent in his decisions, i.e. had a stable system of preferences. In addition, the reliability of economic indicators requires taking as a basis the condition that an Economic person has unlimited access to the information he needs, is able to instantly process it and achieve, on this basis, perfect foresight regarding future events, without delay to assess the situation and make the only correct decisions ... The obvious unrealism of such assumptions stimulates modern economic thought to actively search for alternative models of man in the economy.
Let us consider the reasons for the emergence of the Economic Man and the grounds for its use in the neoclassical economic theory of the present period. The current economic theory was formed in the middle of the twentieth century, after the end of the 2nd World War, when the past war, its causes and horrors, were perceived as the last act in the irrationality of humanity. Hence, rational behavior was accepted as a consequence of the victory of reason over fascism, over its "sick goals and ideas about the world." Fascism was perceived to be just such a well-fed, sleep-deprived, empty and irresponsible idler, an ignoramus, who took a machine gun and decided that all the other people who strainedly created and provided this world with their work ... were not people. A post-war man of that time could not imagine that a voluntary or involuntary desire to kill people could be repeated. In addition to such an understanding, a person as a reasonable person, the future seemed wonderful and convenient, in view of the development of industry and production technologies. Former luxury items have become available to many: refrigerator, tape recorder, TV, car, etc., cease to be attributes of the life of a few. Apologists of neoclassical economic theory, saw with their own eyes that people spent their income and savings on the right things, were prudent, far-sighted and careful in their spending. Objects and things were made soundly and forever, as it was in the historical tradition of mankind, when the frying pan was inherited. The trend clearly indicated that more and more people are finding meaning and joy in a secure and planned, that is, intelligent and rational life. Each person could see their happy future. The 60s, 70s of the twentieth century are the heyday of mankind, when the bad was behind, and everyday life becomes convenient for life.
The next reason for the emergence of the Economic Man is the construction of the Economic Theory with the possibility of using the mathematical apparatus for the analysis and calculation of economic activity. The desire to collect data and place it in some kind of formula, which will result in a correct reflection of the state of the economy and will allow to adjust the impact on economic activity, will show how to manage the economic ship that carries humanity to the calculated prosperity. And of course, in such a formula, there was no place for an unreasonable person who makes irrational acquisitions and thereby violates the mathematics of the economy of the future ... however, everything went according to another not the best scenario. Therefore, our life is the way we see it and live it, and our future is difficult to predict.
Despite criticism of the use of such a concept as an economic person in economic theory, his existence can be considered not as an abstraction, but as the desire of science (several sciences) to bring human behavior closer to such a rational option. And here, when comparing the conditions for the existence of an Economic Person in Economic Theory and the designated goals of the implementation of the NEC2020 Concept, it can be noted that the tasks to be solved for each of them are quite similar. For Theory, this is the existence of an Economic person, that is, a rational Buyer. For the Concept "New Economy of Consumption", this is the creation of economic conditions for the emergence of a Reasonable Buyer, which, under a certain assumption, is the same essence.
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2020.08
2021.12
Article in ORIGINAL language HERE
