Upon my return to the USA, and for the first big American event Thanksgiving, I visited my family friend in Pennsylvania. I also met one of my former classmates from a grad school nearby. Every one of us from the school was doing different things this past year. I was in Rome studying development economics and consequently working at IFAD.
As we caught up with our lives in the past year, I brought up a class/professor (Dr. Leonardo Becchetti) I really liked in Rome. He promotes Economics of happiness and heads an Italian ethical bank (The Economist explains it). I liked when he started to talk enthusiastically and convincingly about how the economics of happiness works, and to prove that what people want. I specifically remember one of his power point slides for the class that said the following:
Homo economicus is…
- absolute minority
- socially harmful
Anyone who has economics background would know who homo economicus is but for those who do not (and I was one of them), it is a concept of human on which many economic theories are based. Homo economincus acts in 100% myopic self-interest. His/her utility (≈happiness) depends exclusively on results with minimum effort. I do not dare to say that I remember everything he taught us, but bits and pieces of important points are remaining in my brain.
So according to him we indeed are social beings. We are self-interested but in a long-sighted way. We care for our relationships with other people, and those are valuable in terms of what makes us happy. I came to Pennsylvania, investing money and time. I don’t mind doing it because spending time with good friends of my life positively affects my happiness.
This is just a meager part of the whole theory, but this happy economics explains how the concept of fair trade works. The premium people pay for the fair trade goods reflects their social preferences, which makes them happy…
There is no way I can tell everything what he told us in the class, nor can I know of many papers he’s written, but it is definitely fascinating. As far as I know, he defends his argument well, and I advocate it, for it mediates me tending to have an idealistic view of the world and most people with realistic views of it.