Economic Man’s strategy of self-reliance is thus not “super-rational”: it is idiotic. But because we mostly rely on each other, we are liable to adopt herd behaviour, and hence, on occasion, to catastrophic collective error. Financial economists missed the Global Financial Crisis because they assumed that since banking professionals were behaving like Economic Men, they would “know the model”. The bankers indeed thought that they did, but what they were actually doing was following the herd – and the herd had got it wrong.
We are the only species that is morally load- bearing. We care for others beyond young offspring, and we are able to build vast networks of mutual obligation, even with people we have never met. Repeatedly through life, we stumble into dependence and require this non-transactional support. The life-cycle, in which we are born utterly dependent and end utterly dependent, is well suited for a community of prosocial people. And yet, economists have theorized the life cycle using Economic Man to predict the asset cycle: borrow when young, pay back and accumulate during working life, and dissave in old age.
I read the above while a mechanic (at Arco Tire in Somerville) checked my car for what I thought was a problem with the shocks. He could have easily
bagged hundreds of dollars by saying, yup, you’re right. Instead, he said you just need to actually inflate your tires, which I had forgotten to do since last spring. I asked how much I could pay for his time, and he said it’s free.
You could say he did do this out of selfishness, and the consideration of repeat business. But there’s a good chance he just thought it was the right (pro social) thing to do, and besides, there are so many ways he could lose my repeat business if that’s his sole motivation
(e.g. I don’t drive much, so I might not need a repair for several years, or I forget about this, or I get a recommendation from someone else) that it gives the move a lower expected value than just taking the shocks money.
The full description of Economic Man includes the epithet “rational” – and the fact that rationality must entail selfishness is the insistent fallacy on which this being has been constructed. We have arrived at the vile heart of the matter: in the phrase used by Jonathan Aldred for the title of his critique of how the subject has evolved since the 1950s, economics has provided a Licence To Be Bad. And more than just a licence: by linking selfishness and greed to rationality, economics instructed the business community to judge itself on these criteria. And so they became praiseworthy. The insidious diffusion of this norm of anti-sociality reached its apotheosis in Donald Trump’s justification for paying no tax despite being a billionaire. Instead of revealing that his ethics were incompatible with public service, it showed that he had been straining every muscle to be rational. As he bragged in the televised debate, it showed that he was “smart”