Showing posts with label homo economicus. Show all posts
Showing posts with label homo economicus. Show all posts

Tuesday, August 13, 2019

Arnold Kling: the significance of Dunbar's number

Arnold Kling writes:
"Referring of course to the Dunbar number that marks the boundary between small-scale society and large-scale society.

The public operated in the sub-Dunbar sphere. You were concerned with your own family, friends, and co-workers.

The elite managed in the super-Dunbar sphere, running government and large organisations, including mass media. The public knew that the elites were out there, but the public felt no direct connection to the elites. When elites contested with one another, the public were largely bystanders."
There's a lot more at the link.

Kling is a libertarian economist who thinks in terms of models applied to an amorphous social reality. This makes him an over-reductionist. The right way to think about society is:
  1. Social formation - society as it concretely presents itself.
  2. Mode of production - which generates the class structure and social dynamics.
  3. Human nature - which defines the human elements from which behaviour originates.
Orthodox Marxism gets (1) and (2) right and ignores or misunderstands (3), hence its utopian perspectives.

The more enlightened bourgeois intellectuals like Kling think the world is constituted from (1) and (3) and forgo a class analysis - we see ahistoric, universalist categories such as 'public' and 'elites'.

Kling is better than most, though. The orthodox neoclassical economists simply present patently ideological models of (1), with (2) and (3) being replaced by the atomised egoists of homo economicus. Steve Keen is not a Marxist but his critique of this is not inaccurate.

The idea of the Dunbar limit is a powerful one. It allows the concept of nationalism to be approached without misleading ideas that it's either an empty illusion (a logical consequence of neoclassical economics) or that it's some reactionary antithesis to an ideal state of perfect global compassion and universal love. We can safely leave the latter to the overly religious, the social-liberals and SJWs.

In practice people care about their immediate circle, people they know individually and find they like. They care about the concept of their nation insofar as their co-nationals conform to an ideal of behaviour: one which they believe - with substance - buttresses the stability of the institutions and relationships which guarantee their security and their way of life: an ideal-supertribe of generally-amicable 'us'.

There is a lot to be said about a correct theory of nationalism, and how relevant, useful and indeed functional the phenomenon may be in the 21st century.

But without Dunbar's number the analysis doesn't get very far.

Thursday, November 22, 2018

A slight defence of homo economicus

Amazon link

I've just started this and on page 5 I read:
" Many times the information required to arrive at the theoretical optimum is not available to those who make the decisions, and even if the information is available, the people who make the decisions often do not have an incentive to implement the optimal policy."
If we could only be more like homo economicus, how much better capitalism would work. Cue the application of behavioural genetics in engineering mode.

---

Homo economicus is "... a portrayal of humans as agents who are consistently rational and narrowly self-interested, and who usually pursue their subjectively-defined ends optimally." (Wikipedia).

In fact public choice theory does assume homo economicus, but asserts that incentives often can't or don't align - eg the principal-agent problem, market failure, etc. In capitalist economies consisting of real people, things work even less well.

Who or what should we blame?