Key Points
-
Human beings aspire to enjoy as much as possible with the least possible effort.
-
Behavioral economics combines psychological and social considerations in predicting economic behavior.
-
Every person is strongly affected by society, even by those of whom we are not aware. We appreciate ourselves compared to those in our environment, and cannot tolerate having less than others around us.
-
In the current social and economic frameworks, people cannot be satisfied, nor can society continue to remain stable.
-
The new society that will thrive by relying on relative and idiosyncratic equality. Those within it will be rewarded with the fulfillment of psychological needs that they are not expressing today.
-
A mutual guarantee-based economy will have altruistic characteristics.
Every scientific method begins with a premise, and economics is no exception to the rule. While hard sciences engage in minerals, plants, and the cosmos at large, economics engages in something far more volatile and unpredictable: human nature. One such premise in economics is John Stuart Mill’s [82] “homo economicus” (the economic human). Roughly speaking, the goal of the economic human, namely each of us, is to obtain the maximum pleasure for the least effort.
And what does the economic human enjoy? The consumption of goods. The more goods we consume, the more we enjoy our lives. Additionally, we are not keen on hard work, so we weigh everything by the measure of exertion required to obtain our goods. Economic humans wish to maximize their benefits by choosing the alternative that best serves their preferences under their budget limitations.