Do we need a new Image of Humanity in Economics?
What does success actually mean? Having a well-paid job? Driving a luxury car? Living in a big house? Or has it to do with happiness and fulfillment? With having a family? With seeing one’s children grow up? With enjoying good times with friends? “The gross national product should no longer be the sole measure of success,” the well-known Buddhist monk Matthieu Ricard said. “Social cohesion and interpersonal relationships are the best measure for happiness in a society.” Values such as justice, human rights and transparency need to be given more weight in society, the Nobel Peace Prize Laureate and former President of Finland, Martti Ahtisaari, added. “These values and principles don’t cost a single cent. But implementing them does.” The Scandinavian model could be seen as a role model for the world, said Ahtisaari.
“Redefining success” was the central theme of the GES 2013. And for such a redifinition of success, economists need to redefine their image of humanity as well. We all know Homo Oeconomicus, the figurative human being characterized by the infinite ability to make rational decisions. Many economic models have relied on the assumption that humans are rational and will attempt to maximize their utility for monetary as well as non-monetary gains. However, modern behavioral economists and neuroeconomists have demonstrated that human beings often make predictably irrational decisions.
Are humans individualistic, selfish profit optimizers? Or do interpersonal relationships, compassion and selflessness play a much greater role in decision making than previously thought? These almost philosophical questions were discussed in several sessions at the GES. “Our view of the world is about to change radically,” said Professor Dennis Snower, the President of the Kiel Institute for the World Economy (IfW). “We need a new image of humanity in economics. We are only just about to understand how comprehensively we are all linked and how dependent we are on one another.”
That is why economists from around the world have joined forces with psychologists, sociologists, neuroscientists and other scientists to help establish a more realistic image of humanity. “Individuals do not really act individually. We are all interlinked in many ways, often without knowing about it,” said Snower. Economic decisions are also always dependent on the environment in which they are made.
“It seems that today, we need to move to the next level of cooperation to face the many challenges that our times are confronted with,” said Matthieu Ricard. “There has long been an assumption in psychology, economy and evolution that man is essentially selfish. But during the last twenty years, new insights have increasingly pointed out that altruism can be extended beyond our kin and those who directly benefit us and be associated with a sense of global concern and responsibility for our fellow human beings and for other species.”
“In contrast to the exaggerated societal emphasis on individualism in Western societies, new findings in social neurosciences in contrast paint a very different picture of a strong interdependence between human beings”, stated Tania Singer, Director of the Department of Social Neuroscience at the Max Planck Institute for Human Cognitive and Brain Sciences in Leipzig. “A vast amount of evidence suggests that our brains are wired for affective resonance with each other and that we rather automatically represent the mental and feeling states of others in our own brains and bodies.”
The new interdisciplinary field of contemplative neurosciences has begun to reveal evidence for plasticity of prosocial preferences and motivation. “Short-term and long-term mental training studies reveal the potential for the trainability of cognitive as well as socio-affective faculties such as attention, compassion and prosocial motivation in adults”, said Singer. “More specifically, secular training programs aimed at enhancing compassion and prosocial motivation have shown that such mental training not only increases activity in brain networks related to positive affect and affiliation when exposed to distress of others, but also reduces stress-relevant hormonal responses, increased immune-markers, and prosocial helping behavior towards others.”
But how can one measure non-monetary values like our well being? “The quest for a single wellbeing metric is a pitfall because the content of our wellbeing is contextual”, argued Dennis Snower. “Different contexts activate different motivational systems in our brains, giving us different sets of objectives.” We are unable to measure wellbeing by a single measuring rod. The types of pleasure, happiness and fulfillment that are derived from material things and from non-material experiences are diverse and cannot be compared with one another through a single, time-invariant unit of measurement. Instead, we seek different types of wellbeing in different contexts.
But though well being as well as success cannot be defined in terms of a single metric, defining success is nevertheless important, since it can guide us in the choice of our goals in life. “A good conception of success will make us sensitive to goals that could make us happy if we pursue them”, explained Snower. According to the President of the Kiel Institute, people in the developed and emerging economies should press an internal reset button, realigning their pursuits with their sources of durable wellbeing. “We must become open to the possibility that the relentless chase after economic growth may obstruct our awareness of where our fulfillment lies”, said Snower. “In order for humanity to overcome many of its severest global problems, we need to redefine what we consider to be ‘success’.”