Bryan Caplan lets the cat out of the bag with his post, 'Applied Economics Assumes Selfishness, and Rightly So'. In that post, he writes:
'Yes, I know that textbooks love to claim that economics assumes "optimizing behavior," not "self-interest." But whenever economists do applied work, they quickly slide to self-interest. You know why? Because although people aren't perfectly selfish, they're shockingly close. That's why economics tells us so much about the world.'
And Caplan is absolutely corrrect in the above. The backpedaling economists often engage in when challenged on this, the disclaimer, 'No, no, the martyr fits our models just as well as the hedonist does,' is, as Caplan notes, an abuse of ordinary English.
What Caplan does not see is the larger picture: the ubiquity of such individuals in our midst, whose life is focused on maximizing their own material welfare, is largely itself a product of modern, liberal individualism, and, to a great extent, the product of economics itself. Furthermore, far from being an uncontroversial model of 'rationality', most of the world's population, in most times and places, would have seen such behaviour as an example of a type of lunacy or degeneracy.
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