In today’s world economic structure defines the patterns of not only a market but also those of our lives. The modern economy considers human beings interacting in the market as “homo economicus” whose actions are motivated by individual self-interest. This is why the general perception of being rational in all fields of life is en-rooted in the notion of self-interested behaviour. I, however question this assumption and ask “Is self-interest really rational”? If yes, then why does homo economicus donate money?
Adam Smith and his followers argue that pursuit of self-interest of “rational” beings result in the desired collective optimality by the working of invisible hand. On the contrary, Amartya Sen identifies Smith’s economic man, a“rational fool” who lacks the ability to cooperate with others. Moreover, game theorists support cooperation among agents to maximize the social optimality, because the pursuit of narrowly defined individual self-interest does not lead to collective optimality, as illustrated by Prisoner Dilemma and the Tragedy of the Commons.
Contemporary environmental problems created by man’s large scale economic activity have also proved that the behaviour of humans to acquire their own self-interest in not rational in its true sense rather its dangerously irrational.
Its the time to question this very basic assumption of economic model, and our lives in essence, to bring humanity’s optimal towards cooperation instead of competition and redefine the term “rationality”.