We Are All Economic Men

Introduction

The term economic man was initially applied by Joseph Pseky1, which is a new concept in the field of economics. However, it is linked with the ideas provided by Adam Smith, David Recordo, etc. during the time of the 18th century. Although, this concept had arrived due to writings done by the writers and thinkers, presently, it is taken in an existing form. The idea has been developed to showcase the rational behavior of consumers, industry, and firms (Fox, 2015). This essay has made an in-depth analysis wherein it has resembled the present situation and practice of all human beings with the economic men, which is a fantastic concept. Since the aim of the study is to analyze that each of the human beings is a commercial man, this essay has made an in-depth study upon the economic man who has lastly concluded its resemblance to a human being.

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An economic man

An economical man is one a basic concept of modern economics wherein it is assumed that every individual who sustains in the capitalistic society is motivated by various economic forces. The individuals could be either consumers, businessmen, or employees. They are termed as an idealized person who reacts rationally and possesses the knowledge and always makes ways to enhance personal satisfaction. They behave in a self-interested approach to maximize the satisfaction level. The maximum satisfaction level takes place in various formed, which includes enhancement of the level of profit by the businessman, maximize consumption utility, or even providing leisure hours for workers (Hutchinson, 1984). It is a concept that is developed by economists to acknowledge human behaviors to engage in the activities of the economy. This assumption assists economists in making a study on how the market would work if it were populated by the economic person. Economists make this assumption to analyze the behavior of the market. The economic man is a person who tries to enhance the received utility attained through monetary outflow and sacrifices (Varoufakis & Hargreaves-Heap, 2004). The firms, industry, and consumers are the units to decide in the economy. The importance of the concept of the economic man is linked with the theory of consumer behavior wherein a real person starts functioning like the fictional entity. On other words, it can be stated that economics is an ideas and conventions which are brought together by the economist to explain the culture of doing things in an organization (Patricia, 2006).

In this concept, it is assumed that the behavior of an economic person needs to be rational. Rational behavior is understood that each of the units aims to enhance their advantage. For instance, when consumers decide to purchase goods or services, then they spend all its available resources to maximize the satisfaction of its items. When a consumer possesses rational behavior, then consumers are said to be found in the equilibrium position, whereby attainment of happiness is the main motive and goal of the economic man. In the same manner, when a firm decides to generate something after the consumers demand, the primary purpose of the firm is to maximize the level of profit (Blaug, 1980). This is the reason that firms make every possible way and effort to enhance the difference prevailing in between selling prices and costs prices so that it can improve the level of profit, which is the rational behavior of an individual man. In the whole concept of economic men, there is no glimpse of moral values or benefits for others. The economic man is solely self-centered, and they do not keep room for moral values. They are self-interested and never think about other interests. The industrial man’s approaches are mundane, and individual is always bust in calculating with their profit or loss even in monetary fields. The main aim of these individuals is to attain maximum advantage for this life (Bensusan-Butt, 1991). This individual restricts themselves to present days and never think regarding their future. The short-term benefits are highly preferred by these personalities in a higher extends. They even make rational choices to enhance their utility, and opportunities are linked with marginal utility concepts. It is also stated that the decision making of the economic man is not valid and fruitful as they have a conservative mindset, which leads to a decline in decision-making power (Patricia, 2006).

As per Min & Zhenggang (2013), an economic man is a homogeneous entity that possesses a desire to full its self-interest whereon self-interest might be linked with tangible and intangible desire. The economic man is applied in economic theory whereby the model assumes that firms are maximizers of the profits and would make responses to the price change, which results in a shift in demand. Economic man is also an assumption in the economic theory wherein an individual acts in a rational manner in a specific way. It makes decisions that are consistent with their objectives. Herein, an economic man who is an entrepreneur sets goals to maximize profit and make adjustments in output and process to attain the goals. As per the game theory, industrial man is modeled by the postulation of the perfect rationality (Herbert, 2011). It assumes that agents maximize utility as consumers and profit as producers. Economic man tries to attain the coordination of the sociality and individual rationality by searching and comparing different data and information and thus makes decisions to achieve satisfaction. Economic man is also found to live their life in a restricted manner. He lives an animal level of experience that restricts to attain maximum comfort, leisure, and profits without achieving moral values. Lastly, they are also deprived of moral values and do not take care of poor people in society (Cohen, ND).

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Conclusion

Taking into consideration the present situation of human beings, it stays that each of the individuals is highly restricted towards their self-fulfillment grid. Men are restricted towards the mundane world and are self-centered. Human beings have started to pursue their interest and goals and do not give a significant consideration upon the happiness or pain of others. Moreover, in an organization, employers do not keep a positive feeling upon their employees and think about their profits and promotions (Blaug, 1980). The selfishness within every human being makes them feel so different and without moral values. The rise in competition and race behind attaining maximum profits and fulfilling one’s dream have further led the business owners and professionals (economic man) to decline the quality of the products and services. People are not taking care of the poor and needy, whereby they are highly concentrated towards their own life only. There is even a declination of the moral values in human beings whereby people do not have discipline and behave in inappropriate behavior. In addition to that, it is also seen that since each of the people are behind wealth and does not want to work if it could be avoided or attained through any other means. Since each of the behavior of the present human beings are like the economic man, i.e., selfish, it can be stated that each of the human beings is commercial men.

References

Blaug, M., 1980. The Methodology of Economics. Cambridge: Cambridge University Press.

Bensusan-Butt, D., 1991. On Economic Man. [Online]Available at:

Cohen, M., ND. The Problem of Studying "Economic Man".[Online]Available at:

Hutchinson, T. W., 1984. The Politics and Philosophy of Economics: Marxian’s, Keynesians, and Austrians. New York: New York University Press.

Herbert, G., 2011. The Bounds of Reason: Game Theory and the Unification of the Behavioral Sciences, P. 172. Shanghai People’s Press.

Min, Z., & Zhenggang, C., 2013. The Study of the Supply Chain Cooperation Mechanism Based on the “Information Economic Man Assumption”. American Journal of Industrial and Business Management, 3(4), 418-428.

Patricia, W., 2006. Adam Smith and His Legacy for Modern Capitalist. Shanghai Translation Publishing House.

Varoufakis, Y. & Hargreaves-Heap, S., 2004. Game Theory: A critical text, London, and New York: Routledge.

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