The Innate Nature of Economics - Economics and Ecology: United for a Sustainable World - page 49

EXAMPLE 3.2
Suppose that a concerned mother is arguing with an economist about
whether strict self-interest always dictates her every action.
Concerned Mother: I'm sacrificing now and giving up things I want so
that my kid can go to college and make something of him-
self. That restricts my options now for his sake. That's not
self-interest. It's more a form of altruism or selflessness. Your
theory doesn't allow that.
Economist: Of course that's self-interest! Your family is just an extension
of yourself, and you would derive great pride and satisfaction
from seeing your son go to college. Besides, if he gets a good
education, and then a good job, you won't have to support
him in the future, and you'll have more later. He may even
support you in your old age. Your transfer of money to your
son isn't a market transaction, but it is thinly disguised self-
interest behavior.
Concerned Mother: I'm not sure I buy that, but let's try this: I'm concerned
about those poorer than I, and I routinely donate money to
the local homeless shelter. Certainly, you would agree that
can be termed altruistic behavior, which you economists pre-
tend doesn't exist.
Economist: Well, not exactly. Of course, you're just making moderate
donations of money you might not even miss. You're not
giving them your entire income. And I'm sure you get some
satisfaction out of feeling 'charitable'—maybe even equal
to the loss of income. Further, by keeping these people off
the street, you minimize other costs, such as reducing the
likelihood of getting robbed. And of course, you get a tax
deduction.
Concerned Mother: You guys are heartless! Given my complete disgust
with this selfish dog-eat-dog consumerist society, what if I
just drop out, grow my own food and refuse to play your silly
materialistic games?
Economist: Not a problem. You may appear to be an anomaly, but it won't
matter. Everyone else will still continue to consume and com-
pete. My models will still work fine for the economy—that's
just the way people are. You're free to do your thing.
This exchange questions the underpinning assumptions about human
nature that support standard economic theory. The economist would
contend that although apparently anomalous behavior might appear to
occur in the short run (e.g., a bit of income to charity), it would not hold
for all ranges of income and would not persist in the long run. Also, as
long as others display the predicted behavior, the models work accu-
rately and thus describe society. Further, the economist would defend
the methodology by construing any apparently altruistic or anomalous
behavior simply as disguised self-interest.