"Economic Man" is wrong in assuming ? Phenomenology of Economic Man Research
Abstract:
Many literatures have pointed out that " Economic Man " mistakenly assumes that people are atomized. However, in market society, the idea that it is wise to regard people as self-interested economic people is still common. This article uses phenomenology to provide an explanation for this. I refer to the research of Alfred Schutz and propose that even if the behavior of the economic Others (the economic Others) is inconsistent with the assumptions of economic man, the economic man model may make its believers feel that they are right. Furthermore, the model guides social action by preventing one from reflecting on the inconsistencies in its explanations. Explanatory reliance on Homo economicus thus creates a "phenomenological impasse." Changing information sources and interpretive schemas can circumvent the above pitfalls in economic interactions, but this article further explains why the norms and cultural perspectives of market societies make it difficult to think of these alternatives and thereby extract lessons from impasses.
About the author:
Galit Ailon, Department of Sociology and Anthropology, Bar-Ilan University
Document source:
Ailon G. The Phenomenology of Homo Economicus. Sociological Theory. 2020;38(1):36-50. doi:10.1177/0735275120904981
Galit Ailon
John Stuart Mill (1844:144) said that the greedy, calculating homo economicus was an extremely simplified model for analysis only, and that no political economist "would be so absurd as to think that mankind is really so constituted" (1844:139). However, many studies have proven that "economic man" is indeed universal in market societies.
In this article I try to explain how the economic idea that humans are self-interested, calculating atoms persists as common sense. My starting point is that this notion is based on the everyday economic interactions of members of market society. Given that "economic man" does not fit the actual situation, I asked, how does it survive in daily economic interactions, and why do people not always find it completely ridiculous in daily economic life?
Existing socioeconomic theory suggests two possible but incomplete answers to this question. The first answer is that economic agents may not be naturally inclined toward asocial egoism, but in market societies they may be socially driven, coerced, configured, or otherwise constituted to exhibit such behavior. The most direct expression of this in contemporary theoretical circles was proposed by economic performativity theorist Michel Callon (Callon 1998). He believed that economic theory has a strong performative ability to produce the world it describes, including setting the core role of economic theory - economic man.
However, although economics is indeed very performative, it is questionable whether the economic man model can actually be set up morally. Economic agents are always more social and complex than what the “economic man” model describes. (MacKenzie and Millo, 2003:109)
The second possible answer is that people simply haven’t thought about this problem. In everyday life, people habitually use practical knowledge that they have internalized through integration into wider social structures (Bourdieu 1977). It can be said that "economic man" is part of this knowledge. It is a practically convenient, taken-for-granted cognitive scheme rooted in the “universe of the undiscussed” of market society (Bourdieu 1977: 168).
This is a reasonable explanation, but why can this misunderstanding of the economic other prevail? After all, the absurdity of "economic man" is easily reflected on the surface, even in daily habitual actions.
My theory is based on Alfred Schutz's (e.g., Schutz 1967, 1970) foundational social phenomenology. Schutz studies the basic characteristics of the interpretive processes that give meaning to one's lived experience - which at its core includes one's lived experience of others - and how these processes form the basis for action and interaction.Schutz starts from the meaning formation in the stream of consciousness of the lonely ego (Ego) and focuses on the subject who understands other selves in "the natural attitude". Schutz regards "the human subject as an embodied being who acts with the help of public social resources, practical knowledge or 'common sense knowledge', and who is situated among other similarly embodied and situated beings." (Crossley, 1996:77) Schutz's classification can help us analyze what will happen if homo economicus is integrated into the common sense knowledge used in economic interactions.
When actors rely on "economic man" as a common-sense explanatory schema, refutation of it is turned into emphasis, and thus, at the level of common-sense, the control of the model is strengthened. This is how the "phenomenological deadlock" of "economic man" arises.
Economic Man’s Explanatory Schema
The starting point of Schutz’s (1967:100, 106-07) phenomenological analysis of interaction is that we cannot directly intuitively perceive, nor can we fully grasp other people’s experiences, but can only see other people’s communicative behaviors. In face-to-face situations we can also see external facts, such as body movements. We rely on interpretation to understand what this information actually means.
These interpretations are determined by the overall context of the knowledge we have access to, chief among them what we know, or think we know, about other people's motivations. Schutz (1967: 171) proposed that people in interactions take it for granted that the other party has one of two motives: "because motives", which are the reasons for a person's actions, or "in-order-to motives", which are the subjective goals that guide a person's actions or what their actions are intended to achieve. In this case, the explanatory schema will be "taken for granted in the absence of opposing evidence" (Schutz 1970:81).
In Homo economicus, the "cause" and "purpose" motivations seem to be quite straightforward. That is, people generally seek to maximize returns and maximize value because they are naturally motivated by self-interest. "Ideal types" take root in people's minds (Schutz 1967:181, 185), and their predictions about the objects of economic interaction are such that greed and self-interest constitute the main internal reasons for their actions.
However, once the interaction unfolds, the perception of the other is revised. According to Schutz (1967), this is particularly likely to occur in face-to-face situations. At this point, "thou-orientation" is realized through our intentional recognition of the other as a fellow human being, and if this is reciprocated, a "we-relationship" emerges (Schutz 1967:163-67; Wagner 1970:34). Schutz (1967:172) explains that what is special about face-to-face interactions is that "to my anticipation of what you are going to do I can add to my expectation the actual picture of you making up your mind and the process by which you formed your action." The knowledge I gain from face-to-face situations is likely to be more nuanced and immediate than my knowledge of a contemporary person who is "contemporaneous with me but not experienced immediately by me" (Schutz 1967:181). Therefore, face-to-face interaction has more possibilities to recognize the correctness or incorrectness of pre-existing interpretations of schemas . The schema then "returns to reality" (Schutz 1967:185) and can be modified on the basis of concrete experience. But relying on the Homo economicus schema for explanations, even in face-to-face interactions, minimizes the possibility of such revisions and returns.
The Phenomenological Deadlock
The explanatory schema of Homo economicus closes off three main channels for detecting errors in the motivations one assigns to others in interactions. It makes people regard the expression of concern in communication as a conspiracy, uses their own experience to question themselves, and prevents people from having a social impact on others. From this, it caused a "deadlock".
I think this deadlock is related to all interactions that use "economic man" as the main explanatory schema. Typical, such as the classic business buyer-seller interaction - where the "economic man" analysis originated.But deadlocks can also occur in commercial exchange interactions that are profoundly influenced by culture (Zelizer 2011), for example, within organizations or in service interactions, against the backdrop of a deepening market logic in organizations (see Cappelli 2000; Kunda and Ailon-Souday 2005), where both parties have to speculate on each other along the lines of buyers and sellers in the market. This deadlock is less direct, but does involve situations where the interacting partner is unknown or invisible (such as online transactions).
Treating good intentions as tricks
Communication between people is each person trying to influence the other party by producing symbols - language, facial expressions, body movements - to let the other party interpret. The complexity of this process must be emphasized. Although the meanings found in them when understanding "need not at all be exactly what the person who produced them had in mind," one "always takes the speaker's subjective meaning into account when understanding" (Schutz 1967:21, 128). It is not enough for a person to simply know the "objective" meaning of a symbol (such as a word). Understanding lies more in imagining the speaker's inner communication goals: what the speaker's motivation for interaction is, or what they are trying to convey.
As mentioned above, the explanatory schema of economic man regards the motivation of all behaviors as ensuring the maximum benefit, and it contains two main meanings. First, when there is no obvious conflict between the communication notation and the specified profit maximization goal of , , it is straightforward to interpret it at face value. For example, operators tell customers the price of their services. If for the customer the price quoted is consistent with the accepted model of Homo Economicus - in other words, if this pricing includes a substantial profit for the operator - then the customer simply thinks: "This is what the operator wants me to pay." However, if there is a conflict between what the operator says and the model - for example, the operator says they want to help the customer for free - then the only logical corollary to draw from the Homo Economicus model is that the operator has something to gain by providing the service for free, and they cannot not be egoistic.
The explanatory schema of Homo economicus is suspicious of anything less than the maximum gain (e.g., small gains, reciprocity, altruism). If the other party's interpretation relies on Homo economicus, any attempt to communicate—that is, to make the other party aware of—the non-calculative contents of consciousness may appear to be masking an allegedly constant, universal profit motive.
Capitalizing on questioning ourselves
Although the interpretive schemata we take for granted in our interactions often escape our direct attention in everyday life, another feature of the way we understand can also call it into question. More specifically, the objects of our interaction only focus on us partially, discontinuously, and indirectly, which means that our knowledge of them “can always be doubted in principle” (Schutz 1967:107). In turn, questioning may make us want to revise, improve our understanding of the other, and adjust our interpretations. We may not really know others as well as we think we do, and this experience can cause us to reevaluate our knowledge about them.
However, if one relies on homo economicus for explanation, there is little chance of this happening. From the very beginning, homo economicus regards the other as an independent individual completely separated from the subject, denying the possibility of truly understanding the other. Homo economicus does not experience feelings of incongruity or inadequacy that warrant attention precisely because it anticipates doubts about itself. And in fact, it only strengthens, not weakens, suspicion of others.
Prevent people from having a social impact on others
In interaction, we not only interpret others, but also influence them: bring about certain conscious experiences in them. When we experience a need to be sympathetically understood, cared for, or helped, our success in influencing those with whom we interact can theoretically demonstrate their sociality: their social attention, responsiveness, and concern. In this sense, the communication of needs becomes a test of the sociality of our interaction partners.
However, according to Schutz, only if the other's future subjective experience and behavior can become my purpose, only if I can imagine what my communication attempt can achieve, that is, if and only if the desire can take shape, can social action affect the other.
However, according to the economic man's point of view, there is no possibility for "others to participate in my life with good intentions" from the beginning. We may make others understand what we say, but if we want to influence their impressions and behavior of us, then that's a different story entirely. Under this line of thinking, sympathy is only possible because expressions of concern are linked to the other's so-called self-interest. Such is the case with today's service interactions, where organizational control mechanisms explicitly link expressions of care to customers to the rewards the operator receives. Of course, this exception just emphasizes the rule from another perspective.
This feeling that others have great restrictions on the subject's own social orientation is crucial to shaping the overall context of motivation for people's social actions. Because the schema of economic man makes it difficult for people to have a social impact on others. Since we are all selfish, all we can do is try to induce our partners to influence us by aligning our own goals (our own motivations for order) with their self-interests.
Of course, in some cases, people's needs are so great that their expression cannot be suppressed or adapted to the self-interest of others. For example, needs related to hunger, pain, despair, or fear are sometimes overwhelming. However, as long as the model of Homo economicus is taken for granted, communication attempts expressed through this huge and unstoppable need are likely to lose the sense of the other before communication begins because the other's mind is considered inaccessible, there is no connection of hope and faith, and the other is never even expected. One may know that reactions are always to some extent uncertain, but without the concept of care or help, there is no possibility of influencing this other, thus in a sense separating the motivation of "cause" - the urgent need - from the motivation of hopeless "end". In short, the explanatory schema of Homo economicus discourages attempts to have a social impact on the Other and will lead to the cessation, restructuring or desynchronization of social actions that would otherwise put it to the test.
Possible paths of avoidance
In theory, two possible sources of information could circumvent this phenomenological impasse: (1) actions and actions outside of communication, and (2) other interpretive schemas. The next two subsections discuss these avoidance possibilities and explain why they are largely normatively and culturally constrained in the contemporary era.
Possible avoidance path 1: Actions and actions outside communication
I believe that the explanatory schema of Homo economicus makes the expression of the other in a phenomenological sense only a sign of egotism, manipulation and alienation. Schutz (1967) points out, however, that our interpretations of others depend not only on what they actually say, but also on actions and actions that are not intended to be expressed, but which we nevertheless perceive, which may embody complex signs of economic concern, altruism, inner struggle, tension, and so on that go beyond the “imagined consciousness” of indifference and social impoverishment (Schutz 2011:87) that Homo economicus depicts.
"Actions" outside of communication refer to gestures and expressions that occur at the same time as daily conversations but are not intended to communicate or express ideas. Normally, people are not aware that they are doing these actions. However, these actions are meaningful to the observer, and Schutz argued that by observing the lived experience of others as they actually unfold in interaction, we can in some sense understand them even better than we understand ourselves (Walsh 1967:xxv-xxvi).
Intersubjective understanding can be obtained from situations other than communication because "we put ourselves in the position of the actor and relate our life experience to his life experience." Such a glimpse of the other's presence can interrupt "the course of the chain of self-evidency" (Schutz and Luckmann 1973:11) that, in the explanatory schema of homo economicus, constrains communicative action.
However, two institutional norms of market society limit people's actions and actions outside of communication with others: norms of economic utility and norms of privacy. The impact of these two norms varies depending on the context, but let us first explore their basic dynamics. The norms of economic utility mainly aim to shorten the time and focus of economic interactions as much as possible, limiting the possibility for people to understand the actions and actions of others outside of communication and to truly understand them. According to Schutz (1967:103), an essential feature of our knowledge of others is that during social interactions we sense that our partner's stream of consciousness is synchronized with our own. This experience, that we "grow old together" (Schutz 1967:103), is important for truly understanding what is going on in other people's heads. If the interaction is too short, we don’t have as many opportunities to do this. The
privacy specification limits our attention to behavior other than communication. These norms (see Kasper 2005) have come into focus over the past few decades and are crucial in counteracting new and old forms of organizational power and in protecting people's dignity and freedom. But as such, they morally sanction the impulse to look away from witnessing actions without an audience, and they implicitly reinforce the sense of mystery behind public scenes. A salesperson sells goods at an exorbitant price, a person suddenly needs time alone, or a mother returns products to the shelf that her child needs but she cannot afford, her eyes are calm and she sighs in pain - privacy norms encourage people not to pay attention to these behaviors outside of communication and confirm the morality and sociality of others in daily economic life, which makes them likely to be suspected by "economic man".
Economic availability and privacy norms provide broad social impetus for the impasse. However, it must be acknowledged that specific characteristics of the relational network (see Granovetter 1985) and the relational context (see Zelizer 2011) also have an impact. Long-term networks of economic relationships in which interactions are repeated (e.g., in organizational settings) may provide individuals with greater opportunities to observe the actions of others outside of their interactions, mitigating suspicion of others. At the same time, institutional arrangements that separate private from public spheres (which are also often a feature of organizational settings) may exacerbate the mystique behind the scenes, precisely because despite the long time together, much is considered private and unknown. Specific patterns and contexts of economic relations may therefore alleviate phenomenological impasses in some respects and reinforce them in others, thereby, I argue, introducing different normative endorsements at the social level.
Possible avoidance path 2: Other interpretation schemas
In daily life, we tend to exclude the possibility that the world may be different from what we see (Schutz and Luckmann 1973:36). However, alternative modes of interpretation have the potential to call this bracketing into question, making what we think we know problematic or questionable from the outset. This likelihood depends largely on the magnitude of the correlation. As mentioned earlier, interpretations are constrained by society's "relevance structure" (Schutz 1953; Schutz and Luckmann 1973). In each case, people only use part of the knowledge reserve to explain, and the selection of this part is based on the "relevance structure", which itself is also part of the knowledge reserve. If one does not think an explanation is relevant to the situation at hand, then it is likely not to cause one to thoroughly question it.
Let us therefore explore alternative ways of thinking about the economy, starting by assessing how likely it is to question this rejection of explanation. Clearly, such alternatives abound. The history of capitalism is not only a history of triumph and expansion, but also a history of ongoing, many of them quite violent, social criticism of mainstream economic beliefs and ideas (Hirschman 1982). But in terms of the phenomenological impasse, the important question is whether these criticisms contradict the common-sense attitude of moral and social skepticism that is at the heart of the account of Homo economicus .
Apparently, for decades, the answer to this question was mostly "no".Many important critical minds have doubted that claims to the highest ideals were naive illusions masking elusive and distrustful motives, forces, or interests. However, in the field of critical social thinking, the term critical usually refers to a "hermeneutics of suspicion" (Ricoeur, 1977) of intentions and moral claims. Indeed, even those critical thinkers looking for economic alternatives attest to the intensity of their own “familiar anti-capitalist milieu” regarding their “suspicions and suspicions” (Gibson-Graham 2006:3).
Importantly, even the most radical criticism always "has something in common with what it is criticizing" (Boltansky and Chiapello 2005:40). Critical texts may reveal important gaps between economic rhetoric and practice, between the rationalization and practical impact of economic policies or actions. But if criticism also tends to attribute the gaps it finds to hidden motives or selfish interests, then it is simply assuming, like interpretation, a dubious alienation between external appearances and underlying motives and forces. In this sense, criticism embodies an interpretive spirit that is generally consistent with the characteristics of economic man.
Moreover, in market societies, this spirit of explanation, that is, suspicion of intentions at the economic level, seems to spread culturally to a much larger extent. has become a very broad meaning structure. For example, the pragmatist sociologists Boltansky and Chiapello (2005: 450) write: “A suspicion of universalized simulations, of the commodification of everything, including the most seemingly noble and altruistic emotions, does indeed form part of our contemporary condition.” They describe a networked capitalist world in which the once fundamental distinction between strategy and personal relationships is blurred.
This argument suggests that current developments are accompanied by a shift in “relevance structures” in which the economic is interpreted in relation to interactions and relationships that were previously considered non-economic. The ensuing (re)interpretation of what once seemed disinterested sometimes takes the form of narratives of disillusionment. "The awareness that one's superficial feelings for one's devoted best friend actually conceal self-serving motives and strategic designs is a classic example of disillusionment - often dramatized in literature, paving the way for disenchantment" (Boltansky and Chiapello 2005: 464; italics in original).
Such awareness has been dramatized elsewhere. The story of the hidden sword in a smile is ubiquitous in various cultural production sites. Under the contemporary cultural logic of epistemology doubt, ontology insecurity and disappointment (Aupers 2012), human reality in various representations is presented to a large extent as being shaped by hidden and selfish motives.
This cultural dynamic does not mean that schemata for the interpretation of the Other other than economics have become completely meaningless. It does suggest, however, that these schemas rarely enable people to thoroughly rethink their economic reality. When economic explanatory schemas dominate the cultural world, expecting unrequited action is dismissed as childish, thereby weakening the rationality of such expectations. This cultural world, then, undermines other ways of interpreting the Other and greatly limits their significance.
Summary
How does "economic man"'s definition of human nature withstand the reality test of daily economic interactions between real humans? What makes people unable to recognize its absurdity in daily life? The answer, I think, is that the model itself "just works" explanatorily. Homo economicus constitutes a taken-for-granted explanation schema in market society, causing a phenomenological deadlock. People regard the expression of concern in communication as a conspiracy, use their own experience to question themselves, and prevent people from having a social impact on others. People do not necessarily accept the Homo economicus model. However, once those with whom they interact take this schema for granted, possible questioning of it by inconsistent behavior is largely obscured or reversed.
Therefore, members of market society often fail to reflect on economic man.The more cases in which the Homo economicus schema is applied successfully, the more it becomes a taken-for-granted basis for such formulation. Furthermore, because a person's knowledge of others with whom they do not interact directly comes largely from their previous experiences with others in face-to-face situations, impasses will influence their perceptions of those with whom they interact without face-to-face interactions. The experience of a standoff can also affect one's view of the overall economy. There is reason to believe that the potency of the “epistemic privilege” (Somers and Block 2005: 265) that persists in the basic idea of market society derives in part from the impasse in everyday life regarding Homo economicus as a basic belief.
The phenomenological impasse therefore contains a great historical irony. Arguably, the most difficult false beliefs of our time to overcome do not lie in some supernatural or mysterious force far away from the world in which we live, but in the inner nature of people. A person may feel that he or she is more complex than Homo economicus: more caring, more socially responsible, and less preoccupied and instrumental. But this pre-existing, taken-for-granted interpretation schema often traps their interactive experience of otherness.
further said that this accumulation of taken-for-granted experience of Homo economicus is not only related to the interaction itself, but also to broader social norms and cultural discourse. In a market society, norms of economic utility and privacy limit access to information that can transcend phenomenological impasses. Although their impact is subject to contextual changes that may be influential, and may even be important in their own right, these norms create a broad social dynamic that impasses people. Furthermore, while there are many critiques, their explanatory spirit is often consistent in some key sense with the explanatory schema of Homo economicus , and the same seems to be true of the broader cultural discourse. The norms and cultural discourse of market society do not make people selfish, but make it more difficult to grasp their social nature. In doing so, they may well turn Homo economicus into the most enduring and influential fictional idea in history.
compilation | nonsense
first review | Aliye
second review | Lin Mo Sheng
final review | Hua Tang Disciple
©Political Theoretical Journal
Frontier Tracking/Theoretical Methods/Expert Comments
ID: ThePoliticalReview
"Looking" Give me a little yellow flower
