I think it depends where. There some geographic areas and areas of society, where this phoenomena only started or it is on its peak. I think.

Good day Lukas, thank you for your comment.

As most of the world is represented in the RIO process/UNCSD and they formally endorsed eco-economic development or green economic development in 2012 as the new dominant paradigm due to the need to partially correct Adam Smith fully irresponsible invisible hand and make it environmentally friendly. 

And therefore in most of the world the traditional economic man of Adam Smith and its axioms as we know them are dead... Of course there will be some people living in the past either because they can not see the paradigm shift from the old economy to the green economy and behave as in the past or they are behind in the development of ideas compared to other places and they slowly pick up and accept new ideas  or simply because they wish to continue living in the past, they know the paradigm has changed and they are trying to solve the problems of the new paradigm as if it was the old paradigm....

Accepting new paradigms take time, but now instead of the economic man we have a green economic man.... In one way we can say that Adam Smith traditional economic man is dead, but a new economic man has been borned, the green economic man.  The first was designed to be fully irresponsible in social and environmental terms, the second is designed to be partially responsible as it is environmentally friendly.

So Lukas slowly the green economic man will take over those areas where the economic man thinking is still being used that you mention...

Wish you a good day Lukas

Dear Lucio,

I recall that some three years ago, while answering a similar RG Question, I made reference to Alexander Fields’ book on ‘Altruistically Inclined? The Behavioral Sciences, Evolutionary Theory, and the Origins of Reciprocity’ (2001). He presented to me an illuminating synthesis of the topic by arguing that “between the two extremes of the "dumb peasant" and the hyper-rational selfish utility maximizer there is a lot of space for nuance and subtlety. Outside economics, in psychology, anthropology, and biology there are scholars who have much to teach us about how economic agents presently behave.

Best regards, Gianrocco

Good day Gianrocco.  Growing up among Peasants and studying with maximizers can give you a nice perfective on things from both angles.

First there is no such thing as a dumb peasant, they may behave dumb among extrangers, but they can also be selfish and maximizers....  Utility mamimizers if confronted with the evidence / facts, they can take a second look at maximizing behaviour to make it a little bit more responsible....the case of the recent move from economic man to green economic man thinking...

Altruistic/egoistic behavior is the choice

a) as to mamixmize is the goal of the economic man, then he has to act egoistically, otherwise there is no maximization.

b) as to mamixmize is the goal of the green economic man, then he has to act egoistically, otherwise there is no maximization.

c) the economic man is dead, but his cousing is alive.

d) We need a model of development that encourages and promotes altruistic behavior and with the goal of optimization, not maximization: the world of sustainabilty markets

Thank you for your comment Gianrocco, and a good day to all

Dear Lucio,

thank you so much for your intervention as I expected a reaction - similar to yours - to the fundamental issue of self-interest and altruism, that involved ever since the concept of Homo economicus. I apologize for being too long, but I believe that the importance of the issue requires it.

In my studies as a ‘non-traditional’ economist, I tried to elaborate on that topic by mentioning that single agent-based models cannot encapsulate properly the complexities of human behavior. Consequently, both economic theories and policies should allow for consideration of hierarchical levels of organization and interaction within a society, primarily groups of agents in a framework of within and between-group diversity.

My principal claim was (and still is) that cultural group selection appeared to be a viable means to incorporate the social interaction among individuals in a sort of non-traditional utility functions and for the transmission of social norms emerging out as successful in terms of enhancing collective welfare. In fact, ‘social norms’, among whose principal aims is that of moderating or putting a brake upon the drive towards personal interest, are the real influential force for those cooperative and even altruistic actions which may lead yet to initial individual material losses, but remain committed to the principles of equity, reciprocity and co-operation that are their motivation. In a sense, social norms aim at complementing the traditional welfare-theoretic results based on the assumption that individuals maximize their own individual utility or welfare without taking into account the welfare of their mates in their decision process on what actions to take. Social norms explicitly, or sometimes implicitly, draw on the pre-disposition of man to consider in a variety of degree the well-being of others in making his choice.

I intend to further elaborate on the strict correlation between cultural group selection, cooperation and forms of altruism which may affect – for instance – the internalisation of external costs related to the implementation of transport infrastructure projects.

In one article, Olof Johansson (See O. Johansson, “Optimal Pigovian Taxes under Altruism”, Land Economics,  Aug. 1997(b), Vol. 73, Issue 3)  introduced rather briefly the role of altruism “in relation to relatives and potential victims” in the estimation of road accident risks. He analyzed - rather exhaustively – the different kinds of altruistic behaviour censuring - with Amartya Sen - what he named the "low-minded sentimentalism" of assuming that everyone is constantly and fully inspired by self-interest. Acknowledging the fact that social theories are induced to adopt severe simplifications of reality because without them it would be impossible to draw any conclusions since the "theory" would be extremely complex, Johansson nevertheless explicitly says that:

“often it seems that many simplifying assumptions, such as neglecting altruism, are used without considering the magnitude of the simplification made”.

“…not much seems to have been done with respect to the influence of altruism on externality-correcting taxes”. “If, in any particular problem (not necessarily dealing with externalities), it seems reasonable that altruistic behavior (as we intuitively think about it) plays a significant role, it is important to carefully consider different possible types of altruism and ways of modeling them, and not to reject some alternatives for ‘dogmatic’ reasons”.

For the reasons he expressed that I consider worthwhile dealing with, I propose to examine hereafter - in a rather synthetic manner - the economic nature of altruism, the mechanism of its progressive affirmation through cultural evolutionary process.

One direction that neoclassical economics has followed in order to take account of motivations different from the egoistic ones has been to consider them as extraneous to the process of maximization. In fact egoists that try to maximize the utility of every action they perform, sooner or later will perceive the ostracism of partners who will no longer entertain relations with them because of their type of behavior. The former will be doomed to fail just if they were the object of a ‘natural selection’ process, so that egoistic behaviors (optimal according to the criterion of maximization) will not prevail in the long run.

A second direction of the neoclassical literature has been proposed by an affirmed school of thought to extend the use of the assumption of rationality, the concepts of utility function and maximization to more complex representation than those considered as the starting points of investigation. Such a new approach consisted essentially in paying attention not only to the structure of preferences but also to their content and to the reason that inspired them. It has also allowed economics to take account of other people’s motivations and of the reciprocal effects of their relations in order to behave according to inspirations of ‘altruistic’ nature.

Essentially, it has been asserted that in order to describe the mechanism of choice and economic decision - given a resource constraint and a social context of individual actions - it was compelling to imagine each agent as operating according to the criterion of utility maximization, distinctive of ‘homo economicus’. Then, this kind of solution has permitted to stay within the limits of the model of ‘homo economicus’ in accepting impulses different from the individual self-interest. In fact, it has been claimed: it is sufficient to expand the domain of the utility function of the rational agent.

However, the explanation of the traditional theory in relation to the presence of altruistic behavior has been considered inadequate. Although this schematic representation of individual action constitutes an integration of grater detail than the original individualistic conception of ‘homo economicus’, it is not yet in the position to fully discern the true nature of the human motivations, altruism in particular. In fact, to consider such a feeling as a simple argument of the utility function means to alter its real essence; in this manner others’ people well-being is no different than an instrument for the agent to maximize its own utility.

To the contrary, the true nature of altruism implies that the welfare of other people be a goal in itself, independently from its effects on own welfare. It has been observed that: “ A defence of altruism in terms of self-interest, albeit broadly conceived, is unlikely to be successful, the reason being that, whereas the concept of utility expresses a certain relationship between the individual and the ‘object’ of his desires or preferences, the essence of altruism is a relationship between persons.”[1].

according to the traditional economic theory, it is manifest how altruism can find a limited space. An individual disposed to make sacrifices in order to increase the welfare of others is inconceivable in a world in which the individualistic principle of the search for personal welfare dominates. Testimony is given by the efforts made to explain altruism in terms of egoistic motivations: even a human action which seems to be induced by interest for the welfare of others actually hides a tacit, to times unconscious, individualistic reasons: social approval, self-esteem or even the restitution of favour from the benefited individual. Obviously, altruism defined in these terms is no other than egoism under a deceitful appearance, so that it is sometimes called “illuminate egoism”.

On the insight from new strands of thought within the sciences of man that recognize and accept inside their schemes of analysis the possibility of altruistic structures beside those of a mere egoistic sort, acknowledgment of “pure” altruism as the predisposition of man to empathy is progressively apparent. The human being seems to be inclined by his nature to carry a feeling of a strong identification with other fellows, such to render possible a deep understanding of the state of other people’s mind [2]. This stream of thought has become a proper ground for those economists unsatisfied by the neoclassical approach and has shown how such an emotional incitement can be the reason of the predisposition of an individual to altruistic actions.

On the basis of such premises, it has become essential – then – to set a new way to deal with the problem of economic relations of an individual inserted within a group. All that starting from the full acknowledgment of the differentiated composition of the “ego” and of the consequent diversity of the origin of motivations. In fact, egoistic purposes co-exist – in every individual – with those more properly inspired by the social nature of man.

In theoretical formulations, it has become necessary to hold account of the individual awareness to belong to a group and to act also in its interest, if not other because the greater welfare of the group ‘falls back’ on the single members that compose it. And then, a further research goal for economic science has become that of ascertaining when an individual caring for self- interest acts in order to maximize his egoistic preferences and when – instead  - he acts to maximize his preferences in relation to the group interests.

On this last point a flourishing economic literature is investigating in order to employ the mechanisms of the cultural evolutionary process. Specifically, the focus of research is based on the analogies which are believed to be valid in order to apply to the field of the social sciences – and to economics in particular – those contributions of the modern biological theory coherently extensible to the explanation of the mechanism of cultural evolution. Particular consideration is given to cultural group selection as a means for confirmation of altruism.

Dear Lucio, thank you for your patience in reading my script and have my sincere wishes for your activity. Gianrocco

[1] See Zamagni S., Introduction in Zamagni S. (ed.), The economics of altruism, Elgar Reference Collection, International library of  critical writings in economics, vol. 48 - Aldershot, Elgar, 1995, p. xvii.

 [2] See, for example, Singer, T., Fehr, E., The neuroeconomics of mind reading and empathy, American Economic Review,  95(2): 340-345

Dear Gianrocco, thanks for such a detailed comment.

I agree with everything you said, but those things can not be done trough the traditional market, simplity is needed to meet the goal of maximization and once you set the goal of maximization, then altruism, cooperation, optimization, internalization, inclusion, non-singular utility, reciprocity are out , they are externalities, and that is why as you said no much has been done to fix Adam Smith's model. From the ecomist/economy point of view works perfectly as designed, maximize profits, the social pain and environmetal pain are externalities...you see.

I will give you some tips of what is coming in my next artilce:

a) The strucutre of the development model at the time of Adam Smith(1723-1790/ the heart of industria revolution was:

D = ABC  , where A = Society

                               B = Economy

                               C = Environment

                                D = Development

b) To be able to promote the expansion of industrialization Adam Smith assumed social and environmental neutrality and be able then to have a maximizing invisible hand in the market so we created the first man-made market, simplifying reality to the max

D = T = aBc    , where T = the traditonal market, a fully exclusive market

Goal maximization, this only allows for egoistic behavior as for example under altruism, social and/or environmenal then there is no maximization...

That is what we had up to 1987 when the Bruntland Commission called for a immediate fixing of the traditional model by making it socially and environmentally friendly and inclusive, something consistent with the issues you mentioned, but instead of fully fixing it as the commission asked, they have partially fixed it making environmentally friendly only

D = G = aBC, where G = the eco-economy or green economy of today, a partially                                inclusive model.

Goal: Maximization; and again you have the same issues under the economic man as  under the green economic man....Social altruism would mean not maximization here too.

d) My paper will be done soon and I will share it in researchgate too, to advance sustainabillty market theory and fully fix Adam Smith model

D = S = ABC,   where S = Sustainability market, notice the similarity to the reality

                           at the time of Adam Smith

That is it for now.

GIonrocco I think you will like the following articles as they may have something that has space for altruism and internalization and cooperation and you may find connections with your thoughts and concerns.

Utilitarianism, Raw Liberalism, Moral Liberalism, and True Sustainability: Basic Paradigm Foundations, Changing Assumptions, and the Evolution of Development Paradigms

https://www.researchgate.net/publication/281277111_Utilitarianism_Raw_Liberalism_Moral_Liberalism_and_True_Sustainability_Basic_Paradigm_Foundations_Changing_Assumptions_and_the_Evolution_of_Development_Paradigms

Complex and Man-made Markets: Are We Currently Approaching Sustainability in a Backward and More Chaotic Way in Terms of Economic Thinking?

https://www.researchgate.net/publication/281277199_Complex_and_Man-made_Markets_Are_We_Currently_Approaching_Sustainability_in_a_Backward_and_More_Chaotic_Way_in_Terms_of_Economic_Thinking

The Past Versus the Present in Development Thinking: Pointing Out the Structure of the Old Agricultural Development Model After Internalizing Environmental Externalities.

https://www.researchgate.net/publication/281244857_The_Past_Versus_the_Present_in_Development_Thinking_Pointing_Out_the_Structure_of_the_Old_Agricultural_Development_Model_After_Internalizing_Environmental_Externalities

The Present Versus the Future in Development Thinking: Towards Agricultural Sustainability

https://www.researchgate.net/publication/281244871_The_Present_Versus_the_Future_in_Development_Thinking_Towards_Agricultural_Sustainability

What If Markets Have Always Been Distorted? Would It Then Be a Good Fix to Add Fair Trade Margins to Correct Distorted Agricultural Market Prices?.

https://www.researchgate.net/publication/281244562_What_If_Markets_Have_Always_Been_Distorted_Would_It_Then_Be_a_Good_Fix_to_Add_Fair_Trade_Margins_to_Correct_Distorted_Agricultural_Market_Prices

Article Utilitarianism, Raw Liberalism, Moral Liberalism, and True S...

Article Complex and Man-made Markets: Are We Currently Approaching S...

Article The Past Versus the Present in Development Thinking: Pointin...

Article The Present Versus the Future in Development Thinking: Towar...

Article What If Markets Have Always Been Distorted? Would It Then Be...

I am sharing here my most recent publications as food for thoughts:

Adam Smith and Karl Marx Under the Sustainability Eye: Pointing Out and Comparing the Sustainability Gaps Behind these Two Great Simplification Failures

https://www.researchgate.net/publication/299885202_Adam_Smith_and_Karl_Marx_Under_the_Sustainability_Eye_Pointing_Out_and_Comparing_the_Sustainability_Gaps_Behind_these_Two_Great_Simplification_Failures

Understanding the Death and Paradigm Shift of Adam Smith’s model: Was Going Green the Only Option? If not, Is This Option the Most Sustainable One?

https://www.researchgate.net/publication/299882613_Understanding_the_Death_and_Paradigm_Shift_of_Adam_Smith%27s_model_Was_Going_Green_the_Only_Option_If_not_Is_This_Option_the_Most_Sustainable_One

The Unintended Consequences of Paradigm Death and Shift: Was the Arrow Impossibility Theorem Left Behind?

https://www.researchgate.net/publication/299879934_The_Unintended_Consequences_of_Paradigm_Death_and_Shift_Was_the_Arrow_Impossibility_Theorem_Left_Behind

Paradigm Evolution and Sustainability Thinking: Using a Sustainability Inversegram to State Paradigm Death and Shift Expectations under Win-Win and No Win-Win Situations

https://www.researchgate.net/publication/298353982_Paradigm_Evolution_and_Sustainability_Thinking_Using_a_Sustainability_Inversegram_to_State_Paradigm_Death_and_Shift_Expectations_under_Win-Win_and_No_Win-Win_Situations

Article Adam Smith and Karl Marx Under the Sustainability Eye: Point...

Article Understanding the Death and Paradigm Shift of Adam Smith’s m...

Article The Unintended Consequences of Paradigm Death and Shift: Was...

Data Paradigm Evolution and Sustainability Thinking: Using a Sust...

Dear friends, here sharing my most recent article which I trust you may find interesting in terms of food for thoughts:

If Going From Free Markets to Non-Free Markets is the Way to Go: Does This Means the End of Rational Decision Making Thinking or Is This Just a Temporary Block of a Perfect Paradigm Shift to Green Markets?

https://www.researchgate.net/publication/312092336_If_Going_From_Free_Markets_to_Non-Free_Markets_is_the_Way_to_Go_Does_This_Means_the_End_of_Rational_Decision_Making_Thinking_or_Is_This_Just_a_Temporary_Block_of_a_Perfect_Paradigm_Shift_to_Green_Mark

Article If Going From Free Markets to Non-Free Markets is the Way to...