Until recently, much of economic theory has neglected the roles that evolution, psychology and biology play in shaping the economy and its human constituents. This has been detrimental to mainstream economics’ narrow vision of economic man, who is supposed to behave in a selfish, rational fashion as he optimises social outcomes, primarily in the realm of markets.
A notable recent contribution which attempts to counter this conception is Rojhat Avsar’s The Evolutionary Origins of Markets. The book argues that the human brain and human behaviour have evolved in ways which make the creating and sustaining of socioeconomic institutions, not least the market and exchange, outcomes of social motives as much as selfish ones.
Avsar’s short book contains a wealth of ideas and applications of studies of human nature to the economy. I will not attempt to cover more than a few of them, or review the book, in this post. Instead I want to discuss one model of the human brain taken from the book and note its implications for our understanding of man in the economy. I will also introduce some ideas from a similar effort by institutional and evolutionary economist Geoffrey Hodgson, which also employs concepts from biology in its attempt to construct an alternative to homo economicus. Continue reading