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The concept of "economic man". Private interests and the common good

Economics, in the understanding of many, is the field of “cold numbers” and objective knowledge. One way or another, this is the only social discipline that claims to be an exact science, which discovers laws that do not depend on the will and consciousness of people. However, this objectivity is very relative, and partly illusory.

No economic theory can do without a working model of man. ( Economic theory- a set of scientific views on economic systems, economic development and economic laws and patterns). The main components of such a model are: a hypothesis about the motivation, or target function, of a person’s economic activity, a hypothesis about the information available to him and a certain idea about the physical and, most importantly, intellectual capabilities of a person, allowing him to achieve his goal to one degree or another.

Dividing the subject of the real economic activity and his theoretical model, we must consider the relationship between them. For economic theory as a generalized reflection of the diverse phenomena of economic life, a simplified (schematic) model of man is simply necessary. Therefore, turning into a premise of economic theory, the original idea of ​​a person undergoes more or less significant changes. It also happens that the analysis technique “gets ahead of itself,” and the working model of a person, as one of its elements, moves significantly away from real behavior.

This relative independence of the theoretical model of economic behavior from empirical data represents a separate problem, over which methodologists are still struggling to this day.

First, knowledge of the human model underlying the conclusions of economic theory reveals to us the range of acceptable values ​​​​in which these conclusions are valid and teaches caution in their application.

Secondly, the model of a person in any theoretical system is closely related to the general ideas of its author about the laws of economic functioning and about optimal public policy. Here we can distinguish two main types of economic worldview (with an innumerable number of intermediate forms). The first type is characterized by models of a person in which his main motive is his own interest, usually monetary, or reducible to money; his intelligence and awareness are highly valued and are considered sufficient to achieve the set “selfish” goal.

In the second type of economic worldview, a person’s goal function is assumed to be more complex (for example, it includes, in addition to income and wealth, free time, peace, adherence to traditions or altruistic considerations), significant restrictions are imposed on his abilities and capabilities: inaccessibility of information, limited memory, susceptibility to emotions, habit, and external influences (including moral and religious norms) that make it difficult to act in accordance with rational calculation. This type of relationship between man - society - politics is characteristic of the historical school, institutionalism. ( Institutionalism- this is the direction economic thought, focusing on the roles that institutions play in the adoption and direction economic decisions). The difference between the two designated types of economic theories is manifested not only in the general approach to the philosophy of economic life, but also in specific recipes for economic policy.

At the same time, it cannot be argued that one type of theory (and policy) is always obviously better than another. The theory of J. Keynes (1883-1946) and the active government based on it economic policy conquered the Western world after the Great Depression of 1929-1933. clearly demonstrated the bankruptcy of the liberal-individualist type of economic theory and politics under the dominance of “super-individual” monopolistic corporations.
(J. Keynes- English economist, one of the founders of macroeconomic analysis. Keynes owns: the fundamental two-volume work “Treatise on Money” (1930), the book “The General Theory of Employment, Interest and Money” (1936)).

When is government regulation, powerful social programs reached such proportions that they began to restrain private initiative and the entrepreneurial spirit, and a return to the liberal-individualist type of economic worldview became natural.

The person represents complex system consisting of many levels. He can be considered as an isolated individual, as a member of a social group, class, society, and finally, of all humanity. In principle, the goal of human economic behavior can be considered both money and the goods behind it, and utility, i.e. subjective benefit derived by an individual from the consumption of goods or services. You can take into account or ignore the impact of certain social institutions (morality, religion, etc.) on individual behavior. But it would be appropriate and justified, from a scientific point of view, to choose a level of abstraction at which specific, essential features of the object of study are identified. The advantages of one or another level of abstraction when studying an economic entity are always relative.

Thus, in order to show the interdependence of all free producers and consumers in a market economy, the best and, perhaps, the only way is to construct a mathematical model of general equilibrium, which assumes an extremely abstract approach to society and the properties of the economic subject.

Finally, thirdly, the model of man in economic science also deserves attention because it reflects the ideological and ideological context of its time, the influence of dominant philosophical movements.

The task of a systematic description of the economy based on the abstraction of “economic man”, driven by his own interest, belongs primarily to the creator of “The Wealth of Nations” - A. Smith. ( Adam Smith- Scottish economist and philosopher, representative of classical political economy. For the first time he defined the task of political economy as a positive and normative science). However, Smith's predecessors were primarily in England. We will briefly look at three of them: the mercantilists, the moral philosophers of the 17th-18th centuries, and B. Mandeville.

The most prominent representative of late mercantilism, J. Stewart, in the book “A Study of the Fundamentals of Political Economy” (1767). wrote: “The principle of self-interest will be the leading principle of my subject... This is the only motive that a statesman should use to attract free people to the plans that he develops for his government.” And further: “The public interest (spirit) is as superfluous for the governed as it must be omnipotent for the manager.” Thus, mercantilist economists already used the working model of human motivation characteristic of Smith’s “Wealth of Nations”, but based on it they gave a recommendation opposite to Smith’s in the field public policy: a person is imperfect (selfish), so he needs to be controlled.

The great English philosopher T. Hobbes, the founder of the second school of thought, which logically and historically preceded Smith, came to approximately the same conclusion. In his famous book "Leviathan" (1651). T. Hobbes called people's own interest "the most powerful and most destructive human passion." Hence the “war of all against all,” the only way out of which may be for people to give up part of their rights to an authoritarian state that protects them from themselves.

Since then, over the course of a century, British moral philosophers - R. Cumberland,
A. Shaftesbury, F. Hutcheson and others tried to refute the antagonism of the interests of the individual and society postulated by Hobbes with the help of various logical constructions.

Their main arguments can be formulated as follows: a person is not so bad as to need vigilant control by the state. Selfish motives in his behavior are balanced by altruism and friendly feelings. Among these philosophers we find the teacher Smith F. Hutcheson. But Smith himself in his “Theory of Moral Sentiments” (1759). developed the doctrine of “sympathy” (the ability to put oneself in the place of another), which gives us the opportunity to evaluate the actions of others.

Smith's third predecessor on British soil can be considered Bernard Mandeville, the author of the famous pamphlet "The Fable of the Bees" (1723), which very convincingly proves the connection between private vices that create a market for many goods and a source of livelihood for their producers, and the general good.

Strictly speaking, Mandeville, in an artistic and polemical form, frankly formulated the thesis laid down in The Wealth of Nations: people are selfish, but nevertheless the state should not interfere in their affairs.

It is also unfair to ignore the continental, in this case the French, roots of his concept (remember that Smith spent about a year in France as the tutor of the Duke of Buccleuch). Here it is necessary to name the encyclopedist philosophers, and first of all Helvetius, who in his treatise “On the Mind” (1758). compared the role played by the principle of one's own (selfish) interest in the life of society with the role of the law of universal gravitation in inanimate nature.

Among the French economists who preceded Smith, F. Quesnay should be mentioned, who gave the most unambiguous formulation economic principle , is a description of the motivation of a subject studied by economic science: the greatest satisfaction (“joy”) achieved with the least cost or hardship of labor.

The idea of ​​"economic man" at the end of the 18th century. just floating around in the European air. But still, nowhere and no one has it been formulated so clearly as in The Wealth of Nations. At the same time, Smith became the first economist to put a certain idea of ​​human nature into the basis of an integral theoretical system.

At the very beginning of The Wealth of Nations, he writes about the properties of man that leave an imprint on all types of his economic activities. Firstly, this is a “tendency to exchange one object for another,” secondly, self-interest, selfishness, “the same constant and never-vanishing desire in all people to improve their situation.”

These properties are interrelated: in conditions of widespread development of exchange, it is impossible to establish personal relationships based on mutual sympathy with each of the “partners”. At the same time, exchange arises precisely because it is impossible to obtain the necessary items for free from a fellow tribesman who is selfish by nature.

Thus, by choosing an industry where his “product will have more value than in other industries,” a person driven by selfish interest is directly helping society.

But at the same time, Smith does not at all idealize the selfishness of the owners of capital: he understands well that the capitalists’ own interest may lie not only in production profitable products, but also in limiting similar activities of competitors. He even notes that the rate of profit, as a rule, is inversely related to social welfare, and therefore the interests of merchants and industrialists are less related to the interests of society than the interests of workers and landowners. Moreover, this class "usually has an interest in misleading and even oppressing society" in an attempt to limit competition.

Smith also distinguishes between the interests of representatives of the main classes of his contemporary society: land owners, wage workers and capitalists.

Smith's approach to other components of the human model is equally realistic: his intellectual abilities and information capabilities. From this side, the person discussed in The Wealth of Nations can perhaps be characterized as follows: he is competent in what affects his personal interests. He operates on the principle: “his shirt is closer to his body” and is better than anyone else able to identify his own interests. His competitor in this area is the state, which claims to understand better than all its citizens what they need. Combating this government interference in private economic life This is precisely the main polemical charge of The Wealth of Nations, to which this book owes primarily its popularity among its contemporaries. Smith assigned to the state's share, in addition to the already mentioned control over freedom of competition, only the functions of defense, law enforcement, and those important areas that are not attractive enough for private investment.

"The Principles of Political Economy and Taxation" by D. Ricardo represent a new type of economic research compared to "The Wealth of Nations" by A. Smith. Using the method of thought experiment and isolating abstraction, Ricardo sought to discover objective economic laws according to which the distribution of goods occurs in society. In order to accomplish this task, he no longer made any special assumptions about human nature, believing that the desire for self-interest is self-evident and does not need not only proof, but even mere mention. Moreover, striving for the ideal of science, Ricardo considered the subject of scientific economic analysis only the behavior of people that is dictated by their personal interests, and believed that a theory constructed in this way cannot be refuted by facts. The main figure for him is “a capitalist looking for a profitable use for his funds.” Like Smith, self-interest is not reducible to a purely monetary one: the capitalist “may sacrifice a part of his pecuniary profit for the sake of fidelity of premises, neatness, ease, or any other real or imaginary advantage by which one occupation differs from another,” which leads to different profit rates in different industries.

Like Smith, Ricardo noted the specificity of the economic behavior of individual classes, among which only capitalists behave in accordance with the logic of their own interest, but this desire is also modified by various habits and prejudices. As for the workers, their behavior, as Ricardo noted, is subject to habits and “instincts,” while landowners are idle rent recipients who have no control over their economic situation.

The model of the individual, often called "economic man", is characterized by:

1) the determining role of self-interest in motivating economic behavior;

2) competence (awareness + intelligence) of an economic entity in its own affairs;

3) specificity of the analysis: class differences in behavior and non-monetary factors of well-being are taken into account.

Smith and Ricardo considered these properties of the economic subject (especially developed among capitalists) to be inherent in every human being. Critics of capitalism, who consider it a passing stage in the history of mankind, noted that such a concept of man was a product of the bourgeois society that was emerging in that era, in which “there was no other connection between people except bare interest, no other motive regulating life together, except for selfish calculations."

The methodology of the classical school, and primarily the concept of “economic man,” underwent fundamental theoretical understanding only in the works
J. Mill. ( J. Mill - English economist, philosopher and public figure in political economy during the period of its disintegration. The most famous essay is “Foundations of Political Economy and Some Applications to Social Science” (1848)). Political Economy - one of the names of economic theory, coined by a French economist
A. Montchretien and widely used in the 18th – 19th centuries.

He emphasized that political economy does not cover all human behavior in society: “It considers him only as a being who desires to possess wealth and is able to compare the effectiveness of different means to achieve this goal. It completely abstracts from any other human passions and motives, except those which can be considered the eternal antagonists of the desire for wealth, namely, aversion to work and the desire to immediately enjoy expensive pleasures." Thus, according to Mill's interpretation, economic analysis moves as if in a two-dimensional space, on one axis of which is wealth, and on the other, the troubles that await a person on the way to this goal.

Political economy, according to Mill, is closer to geometry, its starting point is not facts, but a priori premises; it can be likened, according to Mill, to the abstraction of a straight line, which has length but no width. However, of all the sciences, he considered mechanics, which operates with separate bodies that do not dissolve into each other, to be the most related to political economy. The results of their interaction can be calculated theoretically, and then these deductive conclusions can be tested in practice, taking into account the action of other things being equal, from which we abstracted at the beginning.

By the force of his refined logic, Mill attempted to place the unspoken methodology of Smith and Ricardo, their common sense ideas about human nature, on a rigorous scientific basis. However, in such an impeccable, from the point of view of logic, form, the concept of “economic man” has lost something.

There is another point in Mill's article where various factors are mentioned that counteract the desire for wealth. Their vector of well-being included, in addition to the main component - monetary wealth, also social prestige, “pleasant” occupation, reliability of capital investment, etc. However, both Smith and Ricardo assumed that these non-monetary benefits, which distinguish one investment of capital from another, are constant over time and “compensate for the small amounts of monetary reward in some industries and balance the excessive reward in others.” Thus, here we are dealing with the specification of the capitalist’s target function - maximizing wealth (well-being).

Mill tried to embody these methodological views in his main work, “Fundamentals of Political Economy.” The small chapter “On Competition and Custom” is especially revealing here. As the author writes, English political economy legitimately assumes that the distribution of the product occurs under the determining influence of competition. However, in reality there are often cases when customs and habits are stronger. Mill notes that “competition has only recently become a principle to any significant extent governing agreements of an economic nature.” But even in the modern economy, “custom successfully maintains its position in the fight against competition even where, due to the large number of competitors and the general energy shown in the pursuit of profit,” the latter has received strong development.

The founder of English utilitarianism, J. Bentham, was not, strictly speaking, an economist. ( Utilitarianism -(Latin Utilitas - benefit) - a principle of behavior that denies the importance of spiritual interests and is expressed in the subordination of all human actions to obtaining material gain, selfish calculation). However, he had a great influence on the economists who were part of the circle of “philosophical radicals” he led: D. Ricardo, J. Mill and others, and his economic works occupy three voluminous volumes. In his own words,
"Philosophy has no more worthy occupation than to support the economy of everyday life." Bentham's ambitions in the social sciences were enormous: he wanted, like Newton in physics, to discover the universal forces governing all human behavior, to provide ways of measuring them, and ultimately to implement a program of reforms that would make people better people.

The goal of every human action and “the object of every thought of every feeling and thinking being” Bentham proclaimed “well-being in one form or another” and, therefore, the only universal social science, in his opinion, should be “eudaimonics” - the science or the art of achieving prosperity.

He interpreted well-being in a consistently hedonistic spirit: “Nature has given humanity over to two sovereign rulers: suffering and pleasure.
(Hedonism – the desire of an individual to increase his well-being in the name of maximizing the pleasure received from life). They alone indicate to us what we should do and determine what we will do." Suffering and pleasure, naturally, are not limited to the sphere of purely economic interests: thus, love is quite capable of surpassing monetary interest. Bentham also recognized altruistic motives, but did not believe in them sincerity, and assumed that the same personal pleasures lay behind them.

Pleasure and pain, according to Bentham, are a kind of vector quantities. He considers the main components of these vectors to be: 1) intensity; 2) duration;
3) probability (if we are talking about the future); 4) accessibility (spatial); 5) fruitfulness (the connection of a given pleasure with others); 6) purity (the absence of elements of the opposite sign, for example, pleasure associated with suffering is not pure); 7) coverage (the number of people affected by this feeling). The first two are considered the most important components. Accordingly, well-being, as the author suggests, can be measured as follows: take the sum of the intensity of all pleasures for a given period of time, multiplied by their duration, and subtract from it the total amount of suffering (calculated using a similar formula) experienced during the same period.

Bentham proceeds from the fact that the interests of society are nothing more than the sum of the interests of citizens. Therefore, if a conflict of interests of different social groups arises, it is necessary to resolve the matter in favor of those who have a greater potential amount of welfare if their interests are satisfied, and if these amounts are equal, the larger group should be preferred.

Unlike Smith, Bentham does not trust the coordination of individual "aspirations for welfare" to the market and competition. He considers it the prerogative of legislation, which should reward those who promote the public good and punish those who interfere with it.

The main features of Bentham’s concept of human nature in comparison with the concept of “economic man” are:

Firstly, there is a great depth of abstraction. Thanks to this, Bentham’s model is universal: it is suitable not only for the economic sphere, but also for all other areas human activity. This model is so abstract that it does not distinguish between representatives of different classes.

Secondly, in the field of motivation, it is a consistent reduction of all a person’s motives to achieve pleasure and avoid grief.

Thirdly, in the sphere of intelligence - calculative rationalism. Bentham, in principle, proceeds from the fact that every person is able to perform all those arithmetic operations that are needed to obtain maximum happiness, although he admits that this kind of calculation is “inaccessible to direct observation.”

So much attention that we had to pay to the difference between the concepts of man between the classics and Bentham is, in our opinion, deserved. It is usually given much less space in the history of political economy than the spectacular methodological disputes between the classics and the historical school; marginalists - with the new historical school, as well as institutionalism; neoclassicists - with a "behaviourist" direction. Moreover, many authors consider these concepts to converge to a single model of an economic subject. So, W.K. Mitchell, in his insightful lecture course on types of economic theory, notes that "Bentham expressed most clearly the concept of human nature that prevailed among his contemporaries (and there were two or three generations of them). He helped economists understand what they were talking about." The modern Swiss economist P. Ulrich resorts to the following comparison: “the life path of the “economic man” began a generation after Smith. It arose from the marriage of classical political economy with utilitarianism. The obstetrician was D. Ricardo.” Therefore, we consider it necessary to highlight the fundamental differences between the models man in the classics and Bentham, which most clearly emerged later, during the marginalist revolution.

When we consider the main provisions of modern economic theory, it is difficult to explain the refusal of bourgeois political economy from the theory of labor value without conspiracy theories. It is easier to explain the support by the authorities of capitalist countries for those economists who were against Marxism. The concept of utility was initially subjective, but historically it happened that relations in the economy were reduced to everyday ideas of the exchange of things. Looks especially scary model of man in economics, as a subject driven only by the incredible greed of owning things.

22.02.2018 On this page you will find the text of TWO articles at once - articles ECONOMIC MAN from Wikipedia and translating to Russian language articles Homo economicus from English-language Wikipedia, which set out the concept of economic man in economics, as economic theory is now called in Anglo-Saxon countries. ECONOMICS students can simply skip it.

The original article was titled ECONOMIC MAN on Wikipedia

1.2. Explanations from Vladimir Tochilin: Today, the category of economic man already belongs to the section History of Economic Thought, since the global economic crisis has revealed the helplessness of all orthodox economic theory. Therefore, in my opinion, you can study ECONOMICS concepts only for the sake of expanding your horizons. IN NEOCONOMICS a new model of man has already appeared in economic theory, which is still called the neoconomic hierarchical man.

Man as an economic being

1.3. It must be said that people from an economic point of view were already of interest to ancient thinkers, and with the advent of capitalism in Europe, many - both philosophers and practitioners - began to be interested in the question of ways to increase income. Although most of the works were about replenishing the revenues of the treasury of monarchs, Adam Smith in his treatise The Wealth of Nations unites these authors into one imaginary community, which he gives the name - mercantilists. It is unlikely that the accusation of calculated self-interest was fair to all authors, but Adam Smith opposed active government intervention in economic activity, as was recommended by the majority of mercantilists. Adam Smith himself considered protectionism the most harmful, since, according to his assumption, the entire subject-technological variety of society is the result of the work of many people, which means that people are more likely to have sympathy and support for each other than commercialism. According to Adam Smith, it is the level of division of labor that is a factor in the wealth of nations, and any obstacles to the division of labor interfere with the growth of the market.

1.7. Bourgeois political economists were not satisfied with the concept of class struggle, which predetermined human behavior in the economy depending on membership in social groups. Then it was necessary to consider a person only as a single subject - an individual. If Marx considered class contradictions to be a factor in the development of mankind, then the development of bourgeois political economy went towards subjectivism, since it increasingly recognized the principle that the individual person is a subject of the economy. It seems that bourgeois economists of the 19th century understood their slide into the position of mercantilists, since even John Stuart Mill, whose works became the pinnacle of bourgeois political economy, never used term economic man, although in fact he created a model of man in economics in the context of selfishness and self-interest, as natural properties people, which Mill considered the main factors in economics.

Man in political economy

2.1. Constructing a human model in economic theory is a common practice of any science, since science can only operate with certain abstract ideas. In bourgeois political economy, the concept of economic man began to take shape when, in the works of John Stuart Mill, man in the sphere of economic relations began to be considered only in terms of his desires to obtain the maximum benefit in the optimal way.

2.2. I have already said that the theory of economic man was never formulated in bourgeois political economy; even more, bourgeois political economists until the 20th century avoided using term economic man since he appeared in critics' lexicon John Stuart Mill, in whose works opponents discovered a certain idea of ​​economic man. Although the term economic man was not widely used until the 20th century, selfishness and self-interest were placed as axioms at the core of the main direction of classical political economy, as properties inherent in all people by nature.

Evolution of economic man

3.1. The concept of economic man receives a second wind in neoclassical economic theory, in which category economic person became fundamental. True, now it’s more likely economic and rational man, since the fundamental axiom in neoclassics is the Theory of Rational Choice. Modern ECONOMICS is a fantasy in which all subjects from the moment of birth have comprehensive information about the market, so they often use not even the term rational person, but rational agent.

Article text ECONOMIC MAN from Russian-language Wikipedia.

economic man

Homo economicus(lat. "economic man", in ECONOMICS in the sense of " rational person") - the concept that man, as a rational being, always strives to maximize the profit received and makes choices because of the significance of the economic results of this choice. In the ordinary sense Homo economicus is a person who acts in accordance with this principle.

Foundations of the paradigm in economic sciences

The paradigm of homo economicus(homo economicus) was presented at John Stuart Mill, for whom Homo economicus was not any specific person, but only theoretical model. His referred to the concept of the moral nature of man presented by the Scottish economist and philosopher Adam Smith, for which the individual is free and selfish, but by concentrating on his own interests contributes to the achievement of the common good, although in a significantly modified form, was accepted by classical political economy.

In economic sciences economic man defined as hypothetical person, because in reality the person does not behave rationally, and his decisions are not based solely on economic calculation. The criticality of the assumption of rationality in human actions was understood by such classics as John Maynard Keynes, since in reality it turns out that economic man is not rational, and economic theories should take into account the lack of human rationality in decision making.

Mixed models of man in economics

Based on the relationship between economics and social sciences, concepts arise that relate to both the economic and sociological traditions, in particular socio-economic man concept, the concepts of selective rationality and bounded rationality, as well as the concept of family maximization, which appeal both to the influence of the environment on the individual and his choices, and to the lack of information necessary for fully rational behavior in the market.

Explanations from Vladimir Tochilin: The rapid development of capitalism at the end of the 19th century provided enormous factual material, on the basis of which many researches by practitioners appear, and even the first attempts to construct theoretical generalizations. Moreover, these works were distinguished by the presence of mathematical calculations, which was not present in the works of professional economists of that time. The main part of the work dealt with the topic of obtaining maximum profit while minimum investment, therefore, these studies received the name - marginalism from the word margin, which meant difference between price and cost(analogous to the concept of profit).

4.2. Among the bourgeois political economists there was Alfred Marshall, who tried to combine the research of marginalists with bourgeois political economy, using in his works the word form economics, which he invented. Apparently, according to Marshall himself, the term ECONOMICS correctly reflected the essence of his first works - as a MIX of marginalist hypotheses and theoretical generalizations, which he tried to combine on some common basis. Such a basis for the adoption of the ideas of marginalists into bourgeois political economy was the theory of marginal utility, as a new theory of value, different from labor.

economic man

As in any social science, these assumptions are, at best, “approximations.” This term economic man often used in scientific literature, perhaps most often by social scientists, many of whom prefer structural explanations to those based on the rational actions of individuals.

Using the Latin form homo economicus, of course, has long been established; Persky traces this back to Pareto (1906) but notes that it may be older. English term economic man can be found even earlier, in John Kells Ingram's History of Political Economy (1888). The Oxford English Dictionary (OED) gives an example of author Charles Stanton Devas using the word form homo oeconomicus in his 1883 work. Among Mill's critics one can find several other formulations in which they have attempted to describe the role of man in the economy:

Mill studied homo oeconomicus How hunting weapon hunting dollars.

The OED dictionary has several names for the human race:

Names for Homo sapiens use aspects of human life or behavior (indicated by appendix): Homo faber ("feIb@(r)), a term used to refer to man as a tool maker.) Variants are often comical: Homo insipiens; Homo turisticus.

Note that such forms must logically preserve the basis for the "kind" of name - i.e. H omo economicus, but not h omo economicus. Actual usage is inconsistent.

Amartya Sen has argued that there are serious pitfalls in suggesting that rationality is limited by selfish rationality. Economics must build on its assumptions that people can make reliable behavioral commitments. He demonstrates the absurdity and narrowness of some economists' assumptions with the following example of two strangers meeting on the street.

“Where is the train station?” - he asks me. “Over there,” I say, pointing to the post office, “and will you please post this letter for me along the way?” “Yes,” he says, deciding to open the envelope and check if it contains anything valuable.

Criticism of the concept of economic man

Homo economicus concept is based on the personal "utility function" for each person.

Hence, concept of homo economicus has been criticized not only by economists on the basis of logical arguments, but also by empirical considerations through cross-cultural comparisons. Economic anthropologists such as Marshall Sahlins, Karl Polanyi, Marcel Mauss, and Maurice Godlier have demonstrated that in traditional societies, people's choices regarding the production and exchange of goods follow patterns of reciprocity that differ sharply from what is postulated . Such systems are called a gift economy (mutual altruism or reciprocal exchange), rather than a market economy. Criticism , put forward from an ethical perspective, usually refers to that traditional ethic of kinship-based reciprocity that binds traditional societies together.

Economists Thorstein Veblen, John Maynard Keynes, Herbert A. Simon and many Austrian schools criticize as an actor with a comprehensive understanding of macroeconomics and economic forecasting when making decisions. They emphasize uncertainty and bounded rationality in economic decision making rather than relying on a reasonable person who is fully informed of all the circumstances affecting his decisions. They argue that perfect knowledge never exists, which means that any economic activity implies risk. Austrian economists rather prefer to use - homo agents.

Empirical research by Amos Tversky has challenged the assumption that investors are rational. In 1995, Tversky demonstrated the tendency of investors to play it safe on winning choices and to choose to risk losses. Investors have proven themselves to be risk averse for small losses, but indifferent to the small possibility of very large losses. This violates economic rationality as commonly understood. Further research on this issue, showing other deviations from conventionally defined economic rationality, is being conducted in the growing field of experimental or behavioral economics. Some of the broader issues related to these criticisms are explored in new decision theory, of which rational choice theory is now only a subset.

Other critics theories of economic man, such as Bruno Frey, point to an overemphasis on extrinsic motivation (rewards and punishments from the social environment) rather than intrinsic motivation. For example, it is difficult, if not impossible, to understand how homo economicus will be a hero in war or will receive the inherent pleasure of mastery. Frey and others argue that too much emphasis on rewards and punishments can "crowd out" (discourage) intrinsic motivation: paying a boy to do his homework can discourage him from doing those tasks to "help the family" by doing them simply for the reward.

Another weakness is highlighted by economic sociologists and anthropologists who argue that theory of economic man ignores the extremely important question of how the origins of tastes and the parameters of the utility function are influenced by social influences, training, education, etc. the exogeneity of tastes (preferences) in this model is the main difference from homo sociologicus, in which tastes are perceived as partially or even completely determined by the social environment (see below).

Other critics, studying the broadly defined psychoanalytic tradition, criticize model of man in economics(in the sense of ECONOMICS) as ignoring the internal conflicts that people in the real world experience, both between short-term and long-term goals (for example, eating chocolate cake and losing weight), and between individual goals and social values. Such conflicts can lead to “irrational” behavior associated with inconsistency, psychological paralysis, neurosis and mental pain. Further irrational human behavior can occur as a result of habit, laziness, facial expressions and simple obedience.

The emerging science of "neuroeconomics" suggests that there are serious shortcomings in traditional theories of economic rationality. Rational economic decision making has been shown to result in high levels of cortisol, adrenaline, and corticosteroids associated with increased stress levels. It seems that the dopamine system is activated only after achieving a reward, and in otherwise"pain" receptors, especially in the anterior frontal cortex of the left hemisphere of the brain, show a high level of activation. Serotonin and oxytocin levels are minimized and the overall immune system shows a level of suppression. This picture is associated with a generalized decline in trust levels. Unsolicited "gift giving" considered irrational in terms of homo economicus, compared, shows increased stimulation of pleasure circuits throughout the brain, decreased stress levels, optimal functioning of the immune system, decreased corticosteroids and adrenaline and cortisol, activation of the substantia nigra, the striatal and acumbens nucleus (associated with the placebo effect, all of this is associated with the construction of social trust. Mirror neurons lead to a win-win positive-sum game in which the person giving the gift receives a pleasure equivalent to the recipient. This confirms the results of anthropology, which suggest that the "gift economy" predates later market systems, in which the costs of loss or loss of risk are applied.

Responses to criticism

Economists tend to disagree with these critics, arguing that it may be appropriate to analyze the consequences of enlightened selfishness, just as it may be appropriate to consider altruistic or social behavior. Others argue that we need to understand the consequences of such insular greed, even if only a small percentage of the population embraces such motives. For example, free riders would have a serious negative impact on the provision of public goods. However, economists' supply and demand forecasts may be achieved even if only a significant minority of market participants act as homo economicus. From this point of view, the assumption of homo economicus can and should simply be a preliminary step towards a more complex model.

However, others argue that is a reasonable approximation of behavior in market institutions, since the individualized nature of human activity in such social conditions stimulates individualistic behavior. Not only do market settings encourage simple cost-benefit calculations by individuals, but they reward and thereby attract more individualistic individuals. In an extremely competitive market, it may be difficult to apply social values ​​(as opposed to following self-interest); for example, a company that refuses to pollute may go bankrupt.

Defenders models of economic man see many critics of the dominant school using the straw technique. For example, critics believe that real people do not have costless access to infinite information and an innate ability to process it instantly. However, in theoretical economics at the highest level, scientists have found ways to solve these problems by modifying models to more realistically represent the decision-making process in real life. For example, models of individual behavior with bounded rationality and people suffering from envy can be found in the literature. First of all, when it comes to the limiting assumptions made when constructing undergraduate models, the above criticisms are valid. These criticisms are especially relevant to the extent that the professor claims that simplifying assumptions are true or uses them in a propaganda manner.

More serious economists are fully aware of the empirical limitations models of homo economicus. In theory, the views of critics can be combined with homo economicus model to achieve a more accurate model.

Prospects

According to Sergio Caruso, speaking of Homo economicus, one must distinguish between purely "methodological" versions, aimed at practical use in the economic field (for example, economic calculus) and "anthropological" versions, more ambitiously aimed at depicting a certain type of person (presumably existing) or even human nature in general. The former, traditionally based on merely speculative psychology, have proven to be unrealistic and outright incorrect as descriptive models of economic behavior (and therefore not applicable for normative purposes either); however, they can be corrected by resorting to a new empirically based economic psychology, which is not at all like the psychology of philosophers that economists used until yesterday. Among the latter (i.e. anthropological versions), one more distinction can be made between weak versions, more plausible, and stronger ones, irreparably ideological. Visibility of different types of "economic man" (each depending on the social context) is in fact possible with the help of cultural anthropology, and social psychology (the branch of economic psychologists is strangely ignored) if only these types are contrived as socially and/or historically determined abstractions (such as Weber, Korsch's and Fromm's concepts of Idealtypus, "Historical Specification" and "Social Character"). Even a Marxist theorist such as Gramsci, recalls Caruso, admitted homo economicus as a useful abstraction based on economic theory, provided we provide as much , as well as production methods. On the contrary, when alone economic man concept claims to understand the eternal essence of what is human, while at the same time setting aside all other aspects of human nature (such as homo faber, homo loquens,homo ludens, homo reciprocans, etc.), then the concept leaves the field of good philosophy, not to mention social science, and is ready to enter into political doctrine as the most dangerous of its ideological ingredients.

An individual and a group of people in the market are shaped by demand. For financial result It is very important for the seller to timely predict the volume of demand in the future and determine a list of the main factors that may affect it. That is why it is necessary to understand the concept of “model of economic man” and, adding psychological and social aspects to economic ones, begin to use this knowledge in practice. They are relevant both for enterprises acting on the market from the supply side, and for ordinary people, who together provide market demand.

"Homo" modeling or who we are?

Economists have long wondered how a person makes choices, what guides them, and how they rank their priorities. With the development of market relations, man himself evolved. Let us recall the species of “homo” known to us.

Models of man from the point of view of biology or Homo biologicalus:

• Homo habilis or learned to make fire and create means of labor;
• Homo erectus or an upright person, stood on both legs, freeing his hands;
• Homo sapiens or a reasonable person, has acquired the ability of articulate speech and non-standard thinking.

The evolution of people from the perspective of a type of activity and cause-and-effect existence, rich in events, or Homo eventus:

• Homo economicus or an economic person, guided in his behavior by aspects of rationality and achieving the maximum possible benefit in conditions of limited economic resources;
• Homo sociologicus or a social person who strives to communicate with other people and assert his role in society;
• Homo politicus or a political person motivated to enhance his authority and achieve power through state institutions;
• Homo religiosus or a religious person who determines the support in his life and the main motive by the “word of God” and the support of higher powers.

a brief description of The presented simplified event-type models show a person’s system of priorities and explain the motives of his behavior in a particular environment - economic, political, social, religious. Each specific individual can be a “different” person depending on the coordinate system, that is, the environment in which he acts and is identified.

It is interesting to compare the first two event models of people: economic man is individual, social man is too collective and dependent on society. The world adapts to a person, which is reflected in the law of supply and demand, and a social person himself adapts to the social trends of the world in order to avoid being separated from the crowd.

Rationality as the basis of economy

Modeling presupposes a certain system of assumptions, so a person in economic relations has rationality, that is, he is able to make the right decision under the proposed conditions. The following factors influence human rationality:

• availability of information on prices and production volumes;
• a person’s awareness of the basic parameters of choice;
• a high level of intelligence and sufficient human competence in making economic choices;
• a person makes decisions in conditions of perfect competition.

The relationship between the above assumptions leads to the fact that rationality can be of three types:

1. Full, which assumes a person’s comprehensive awareness of the state of the market and his ability to make a decision, obtaining maximum benefits at minimum costs.
2. Limited, which presupposes a lack of complete information and an insufficient level of human competence, as a result of which he strives not to maximize benefits, but simply to satisfy urgent needs in ways acceptable to himself.
3. Organic rationality complicates a person by introducing additional variables that influence his behavior: legal prohibitions, traditional and cultural restrictions, social parameters choice.

Ideas about man as a rational subject with his own needs and motives have evolved along with economic schools. Currently, there are four main models of humans. They differ:

1. The degree of abstraction from the diversity of social, psychological, cultural and other aspects of a person’s personality.
2. Features of the environment, that is, the economic and political situation around a person.

I. Model of an economic man - a materialist

The concept of "Homo economicus" was first introduced in the 18th century as part of the teachings of the English classical school, and later it migrated to the teachings of marginalists and neoclassicals. The essence of the model is that a person seeks to maximize the utility of acquired goods within limited resources, the main of which is his income. Thus, at the center of the model are money and the individual’s desire to get rich. An economic person is able to evaluate all goods, assigning value and utility to each for himself, because when making a choice he is guided only by his own interests, remaining indifferent to the needs of other people.

A. Smitha actively manifests himself in this model. People in their activities proceed solely from their own interests: the consumer strives to purchase the highest quality product, and the manufacturer strives to offer the market such a product in order to satisfy demand and make the greatest profit. People, acting for selfish purposes, work for the common good.

II. Model of an economic man - a materialist with limited rationality

Followers of the ideas of J.M. Keynes, as well as institutionalism, admitted that human behavior is influenced not only by the desire for material wealth, but also by a number of socio-psychological factors. A brief description of the first model allows us to conclude that a person is at the basic levels of A. Maslow’s pyramid of needs. The second model moves the person more high levels, leaving priority to the material side of existence.

To maintain this model of a person in an equilibrium state, adequate intervention from the state is required.

III. Model of an economic man - a collectivist

In a system of paternalism, where the state takes on the role of a shepherd, automatically transferring the people to the position of herd sheep, economic man also changes. His choice is no longer limited simply by internal factors, but by external conditions. The state decides the fate of a person, sending him to study through distribution, assigning him to a specific workplace, offering only specific goods and services. The lack of competition and personal interest in the results of work leads to dishonesty, dependent attitudes and a person’s forced stay at the lower steps of the pyramid of needs, when one has to be content with little and not strive for the best.

IV. Model of an economic man - an idealist

In this model, a feeling economic person appears: the concepts of rationality and benefit for him are refracted through the prism of higher spiritual needs. As a result, it may not be size that is more important to an individual. wages, but the degree of satisfaction from one’s work, the importance of one’s activities for society, the complexity of the work and the level of self-esteem.

The fundamental difference from previous models allows us to say that a new economic person has emerged, thinking and feeling equally, distributing priorities in accordance with his internal state.

Here the individual has a full range of needs from basic physical to higher spiritual, the most important of which is the need for self-realization. A person is a complex model; his behavior depends on many factors that can only be predicted with a certain degree of error.

Psychological aspects of the behavior of an economic person

All human economic problems are related to choice in conditions of limited resources. And this choice is greatly influenced by psychological factors. If we turn again to the pyramid of needs mentioned above, we can see the role of intangible factors in human behavior. The pyramid includes the following levels:

• First(basic) - in housing, food and drink, sexual satisfaction, relaxation;
• Second- the need for safety on a physiological and psychological level, confidence that basic needs will be satisfied in the future;
• Third- social needs: to exist harmoniously in society, to be involved in any social group of people;
• Fourth- the need for respect, to achieve success, to be distinguished from society on the basis of competence;
• Fifth- the need for knowledge, learning new things and applying knowledge in practice;
• Sixth- in harmony, beauty and order;
• Seventh- the need for self-expression, full realization of one’s abilities and capabilities.

Man and society

The manifestation of a social component in human behavior can significantly affect the economy, breaking the usual ideas about the interaction of supply and demand. For example, a phenomenon such as fashion involves bringing certain trendy products into a higher price range, distorting the price-quality ratio.

They are always in demand, but the purpose of purchasing this category of goods is not to satisfy vital needs, but to maintain the status of an individual, to increase his self-esteem.

A person is a social subject, therefore he always acts in accordance with or contrary to the opinions of others. Therefore in modern world a socio-economic person has appeared who also makes choices in conditions of limited resources, but with an eye on his psychological needs and the reaction of society.

The manifestation of "economic man" in modern people

Let's consider the example of an economic person, solving a household problem.

Task: Suppose economist Ivanov earns 100 rubles. at one o'clock. If you buy fruit at the market for 80 rubles. per kilogram, then you need to spend an hour to get around the market, choose the best product and stand in line. The store sells fruits of good quality and without queues, but at a price of 120 rubles. per kilogram.

Question: At what volume of purchases is it advisable for Ivanov to go to the market?

Solution: Ivanov has the opportunity cost of his time. If he spends it on office work, he will receive 100 rubles. That is, in order to rationally spend this hour walking around the market, the savings on the price difference must be at least 100 rubles. Therefore, expressing the purchase volume in terms of X, the total cost of fruits sold on the market will be:

80X + 100< 120Х

X > 2.5 kg.

Conclusion: It is rational for the economist Ivanov to purchase cheaper fruits on the market in volumes exceeding 2.5 kg. If you need a smaller amount of fruit, then it is more rational to purchase them in the store.

Modern economic man is rational, he intuitively or consciously assigns a certain price to everything and chooses from among the alternative options the one that suits him best. At the same time, he is guided by all possible factors: monetary, social, psychological, cultural, etc.

So, economic man...

Let us highlight the main characteristics inherent in the modern economic man (EH):

1. Resources, which are always at the disposal of the EC limited, while some are renewable and others are not. Resources include:

• natural;
• material;
• labor;
• temporary;
• informational.

2. The EC always makes a choice in a rectilinear coordinate system with two variables: preferences And restrictions. Preferences are formed on the basis of a person’s needs, aspirations and desires, and limitations are based on the amount of resources available to the individual. Interestingly, as opportunities increase, a person's needs also rise.

3. EC sees alternative options choice, is able to evaluate and compare them with each other.

4. When choosing an EC guided by exclusively their interests, but his zone of influence may include family members, friends, close people, whose interests will be perceived by the person almost on an equal footing with his own. His interests can be formed under the influence of a whole variety of factors, not only material ones.

5. Interaction between socio-economic people with their interests takes the form exchange.

6. The choice of EC is always rational, but due to limited resources, including information, the individual chooses from the alternatives known to him the one that is most preferable to him.

7. EC may be wrong, but his mistakes are random.

Studying an economic person, his motives for action, his system of values ​​and preferences, as well as the limitations of choice will allow him to better understand himself as a full-fledged subject of socio-economic relations. The main thing is that people become a little more literate in economic issues and made fewer mistakes, systematically improving their quality of life.

2. The principle of rationality in the activities of “economic man”

3. The principle of alternative choice

4. Principle of increment of limit values

5. Principle of equilibrium analysis

Bibliography

1. The principle of limited resources

Economic theory describes and systematizes knowledge about economic processes and phenomena, reveals the essence of economic laws, patterns and trends. Economic theory acts, on the one hand, as an “intellectual toolkit” for other economic sciences, and on the other hand, it contributes to the formation of the “thinking technique” of economic entities.

Like any science, economic theory is based on a certain set of principles, that is, restrictions that allow us to establish the framework of research and highlight the uniqueness of the subject and object of study. These principles are a kind of “rules” that provide the logic of economic thinking, reflecting the basic “beginnings” of solving economic problems.

The principles of economic theory were formed in the process of formation of economic theory as a science. In the hierarchy of principles of economic theory principle of limited goods (resources) is primary. It is the limitation of resources, both non-economic and economic, that forces economic entities act rationally. In the absence of this principle, there would be no need for economic analysis, calculations, planning and forecasting. Humanity has already crossed the stage of primitiveness, in which human needs were so small and nature was so rich that gathering and hunting served as the main sources of satisfying these needs, the division of labor was natural, there was no need for commodity production and commodity-money relations, and “limited resources" gave way to "limited needs." Scientific and technological progress has not yet reached the heights that would help humanity expand its consumption possibilities. The essence of the principle of limited resources, or the principle of scarcity, is to state that all the resources that a person uses, all the benefits that he creates, cannot be freely reproduced or produced in any required quantities in a certain period of time to achieve many goals that people set themselves. “Economic man” finds himself at the mercy of harsh reality. And the first thing he has to do is rank, limit or transform his needs. The second is to realize your responsibility for the consumption, production and distribution of resources. Material (things, objects, etc.) and ideal phenomena (the glory of a commander according to J.B. Sey), ways of changing and moving things in space and time, energy in various forms, and all kinds of information can be considered as a good. All of the above turns into good thanks to utility, a property perceived by a person as a means of satisfying his needs. Non-economic benefits are given to humans by nature (air, sunlight, moonlight). An economic good is, first of all, a product of labor created by economic entities in limited quantities. Secondly, a good becomes economic when its possession is associated with the renunciation of the possession of another good. An economic good requires some kind of payment for it. Land becomes an economic good if labor is invested in cultivating it, if the subject spends other benefits to take advantage of the beneficial properties of the land.

In economic theory, a good is considered to be full or partial ownership rights to another good. For example, the right to sell, exchange for a more useful good, transfer it for use on a compensation basis is a good that characterizes a market economy. The classification of goods is quite complex. Let us highlight some types of goods that, one way or another, reflect the problem of their limitation or rarity.

TO consumer benefits include goods and services that are purchased by the consumer for the purpose of their direct use. In order to study in more detail the dynamics of needs, statistics divide consumer goods into three main groups: food products (food products), industrial goods (shoes, clothing, dishes, etc.), high-quality durable goods (household appliances, cars, etc. .). According to Engel's law, the higher the standard of living of people, the relatively lower their costs for the purchase of food products and the more for the purchase of industrial goods. With a further increase in the standard of living, the demand for high-quality durable goods and the relative share of costs for their purchase in consumer budgets begin to increase.

Production, or indirect goods, are goods that are used in the process of producing other goods. These are raw materials, machines, machines, buildings, professional skills, qualifications, etc. We remind you that in economic theory production goods are usually called resources, or factors of production. These include labor, land, capital, entrepreneurship. These factors represent the main integrated elements economic potential of one country or another. The production capabilities of society have always been limited. With the increase in population, the need arose to involve new lands, a variety of natural resources. Until the beginning of the twentieth century, the growth rate of used resources remained relatively small. This was explained, on the one hand, by a certain stability in the needs of the population, and on the other hand, by the limited growth of the population itself. Two thousand years ago, 230-250 million people lived on Earth, in 1800 - not much more than 900 million, in 1900 - 1.5 billion, in 1960 - about 3 billion, in 1995 - 5.5 billion people Population growth rate in the twentieth century. increased sharply, although at the very end of the 18th century. The young English priest Thomas Robert Malthus developed the law of diminishing returns. According to this law, food will increase in arithmetic progression, and the population will increase in geometric progression. In connection with what happened population explosion At the level of the world community, over the past forty to fifty years, as many natural resources have been involved in economic turnover as were used in the entire history of the development of civilization up to that time. Justification for choosing to use limited resources has become one of the central problems management. Manufacturing directly impacts human needs in several ways. On the one hand, production creates specific goods and thereby contributes to the satisfaction of certain needs. Satisfying certain needs, in turn, leads to the emergence of new requests. On the other hand, production influences the ways of using useful things and thereby forms a certain everyday culture. In turn, economic needs have the opposite effect on production. Thus, needs are a prerequisite, an internal driving force and a specific guideline for creative activity; they are inherent in changing both quantitatively and qualitatively.

The socio-economic progress of society is manifested in action law of increasing needs: with the development of production and culture, the objective need for growth, increasing the quantity and improving human needs appears. The increase in needs does not consist in a simple proportional increase in all types of needs. The needs of the lower order - physiological needs - are saturated most quickly and have a certain limit of development. On the contrary, demands of a higher order are limitless - social, intellectual, spiritual. In conditions market economy What is relevant is the division of benefits into private, general and public, which differ depending on availability (ownership, property) and the nature of use.

In economic theory, two mixed types of goods are distinguished depending on the availability and nature of consumption. These are common resources and natural monopolies. Are common- benefits that are available to everyone, but are consumed by only one (mushrooms in the forest, forest air, water in a reservoir that is the people's property). Natural monopolies are goods that are available to one (he pays for the use of his share of the benefit), but many use them simultaneously (electricity networks, gas pipelines, cable networks, the Internet, etc.). Considering the principle of limited resources, we need to become familiar with the division of goods into interchangeable and complementary goods. Fungible goods are called “substitutes” in economic texts. An example would be different types of transport that solve the problem of movement and can be interchangeable. Complementary goods, or “complementary” goods, are goods that can show their usefulness under the condition of the presence of another good. Thus, a writing pen exhibits its useful properties only if there is paper or other material that allows it to reflect graphic information. The division of benefits into short-term and long-term benefits is also significant. Compare the useful life of food and industrial products.

2. In modern scientific literature, the concept of an economic person means “a selective, evaluating, maximizing person.” This model assumes that a person behaves completely rationally regarding the extraction of utility from economic benefits, while he strives to obtain the maximum result at minimum costs in conditions of limited opportunities and resources used. The actions of a rationally thinking person are subordinated to the desire to maximize his well-being. The rationality of economic man has a universal meaning in TOV, while the private interest of any individual - from the voter to the president - is presented as the main motivating point not only in everyday life and business, but also in public life.

The recognized founder of behavioral economic theory is the Nobel laureate, American economist G. Simon. He created a generalized model of economic behavior, which was called the theory of bounded rationality. Real economic agents make decisions not only on the basis of limited information about resources and methods of their use, but also limited in the ability to process and process this information to make a choice the best option actions. The choice of the subject turns out to be relatively independent of the specific situation and is largely determined by predetermined rules of behavior. Experimental confirmation of this concept is R. Selten. He developed a decision-making model consisting of three levels:

1.
habits

2.
imagination

3.
logical reasoning

When faced with a problem, the subject can limit himself to the lowest level, i.e.

act out of habit, use your imagination and, finally, use all three levels.

In addition to restrictive rationality, NIET identifies another behavioral prerequisite - opportunism (see Topic 2).
Question 55. Interpretation of politics in neo-institutional economic theory

3. Buchanan compares and highlights fundamental differences political market and private goods market. Unlike the market for private goods, the political market, where decisions are made collectively, becomes less and less effective as the number of participants increases. Property rights are unknown, compensation is absent. Political competition as opposed to economic competition does not provide mechanisms for punishment for a voter who votes unwisely in an election, so voting is often irresponsible, resulting in a spontaneous zone of uncertainty.
Question 56. model of direct democracy in NIET

In the modern sense, direct democracy is a political system in which people have the right to personally vote for a political course or program.

The advantages of direct democracy include:

• 
  overcoming political alienation of citizens;
• 
  the ability to optimize management by using the intellectual potential of the entire society ;
• 
  effectiveness of control over political institutions and officials.

Weaknesses are associated with the possibility of making erroneous decisions due to insufficient competence, professionalism and emotional instability of the population, as well as with the complexity and high cost of involving a large number of people in the management of society. All citizens cannot solve all issues at once, since many of them do not have sufficient time, interest, information and competence. If, for example, 40% of the votes are needed to make a decision, then it is possible that two mutually exclusive decisions are approved. This delays the decision-making process and increases the costs of the negotiation process. This raises the problem of cyclical voting (Arrow's Paradox). The presence of this paradox creates a certain degree of unpredictability regarding the outcome of the vote, which can lead to procedural manipulation for profit. The agenda-setting individual or group may have significant power and therefore receive a disproportionate share of the benefits of a particular collective action.
Question 57. Interpretation of the median voter in neo-institutionalism

In a direct democracy, all decisions of the community tend to correspond to the average (median) voter. Median voters are those in the middle of the existing preference scale. Proposed by Black and Plott, the median voter theorem proves that an equilibrium under majority rule exists when it represents a maximum for one and only one individual; the remaining individuals can be split into pairs with diametrically opposed outcomes. And for the top of the distribution of votes it may be typical for those cases when the benefits of all voters interested in one way or another are considered in the election.

Resolving issues in favor of a centrist voter has its pros and cons. On the one hand, it keeps the community from making extreme decisions, and on the other hand, it does not guarantee the adoption of the optimal decision. In a direct democracy, all community decisions tend to be in the interests of the median voter, which is not always economically feasible.
Question 58. Features of public choice in direct democracy

According to the model proposed by Olsen and McGuire, a direct democracy society is characterized by the following conditions:

• 
  all funds that society collects in the form of taxes go to the production of public goods;
• 
  the amount of public goods that goes to each individual must be directly proportional to his contribution to the production of these goods, i.e. there should be no redistribution of income.

Ideally, direct democracy involves the use

In practice, decisions are made by majority vote. A simple majority vote is optimal for a group in which the opportunity cost of time is relatively important. A simple majority of votes is the minimum condition for inconsistent results.

It is achieved in situations where approval of 50% of the votes + 1 vote is required.
Question 59. Interpretation of political competition from the perspective of public choice theory

The main types of elections are elections by single-member and multi-member constituencies. In the first case, the relative majority rule is used. In the second - proportional representation.

All party systems can be divided into 3 main groups:

Single-pole (Russia, Sweden, Luxembourg)

Bipolar (USA, Taiwan)

Multipole (Belgium, Italy, Denmark, Netherlands, Finland)

In conditions of severe confrontation between two parties, the distribution of votes may have a bimodal form. A bimodal distribution can be:

Symmetrical

Asymmetrical

Polymodal ones may also occur.

When none of the parties receives a majority, problems arise (the voting paradox). The minimum winning coalition is the coalition that secures 50% + 1 vote.
Question 60. Features of public choice in a representative democracy.

In a representative democracy, the will of the people is expressed not directly, but through an intermediary institution. Therefore, it is often called diligence democracy.

The bearers of representative power are the national parliament, as well as other legislatures in the center and locally and elected representatives of the executive and judicial authorities. The will of the people in a representative democracy is expressed directly in elections or through a referendum. In addition, the will of the people can be expressed through representative bodies of power, which, within the powers granted to them, independently form the will of the people, and sometimes act contrary to it under their own responsibility.

Among the main advantages of representative government, a free social system and high efficiency in carrying out public tasks should be highlighted. It guarantees political stability and order, protects society from the desires of a wide range of the population for general equalization.

The high efficiency of management representation is explained by the rationality of organizations political system a clear division of labor higher than the direct manifestation of competence and responsible decision makers.
Flaws:
The main drawback in the democrats' vision is the actual removal of the people from power in the intervals between elections, which means a departure from the essence of democracy as a side of power.

Under the condition of democracy, the voting process becomes more complicated. The voting outcome is influenced by the interests of individuals, their groups and legislators.

Both government officials and voters are assumed to behave rationally and strive to maximize their utility. Many voters do not see the benefit of participating in the political process and simply do not vote. This phenomenon in the theory of public choice is called “rational ignorance.”

Among other shortcomings in representative democracy, one should note the possibility of making decisions that are not in line with the interests of the majority of the population, very far from the model of the median voter, and ample opportunities for political manipulation, making decisions unpalatable to the majority using a complex multi-level system of power.
Question 63. Interpretation of lobbying from the perspective of public choice theory

Lobbying is a means of influencing government officials in order to make a political decision beneficial to a limited group of voters. It is built on a mutually beneficial relationship between business and the legislative branch: 1 party (business) receives the relaxation it needs in the field of pricing and tax policy; 2nd side (represented by deputies and their parties) – material support for the upcoming parliamentary elections.

Officials are directly connected to specialized interest groups in parliament. Through the bureaucracy, these groups process “politicians” and present information in a light favorable to them.

The lobbying process can take the following forms:

Blocking laws that allow direct foreign investment or tightening the regime for importing close substitutes, which naturally increases prices for domestic goods.