The individual in economic analysis: toward psychology of economic behavior

“… Economics is supposed to be concerned with real people. It is hard to believe that real people could be completely unaffected by the reach of the self-examination induced by the Socratic question, ‘How should one live?’—a question that is, also a central motivating one for ethics. Can people whom economics studies really be so unaffected by this resilient question and stick exclusively to the rudimentary hard-headedness attributed to them by modern economics?” Amartya Sen, On Ethics & Economics.“… Apart from a few exceptions, the international consensus view within sociology, anthropology, political science and psychology seems to be that agents are not irrational in the way that neoclassical economists presume. The orthodox economic canons of rationality are thus widely rejected elsewhere,” Geoffrey M. Hodgson, Economics and Institutions.“Once we realize that the human mind is everywhere active and imaginative, then we need to understand the routes of this activity if we are to grasp how the human mind works. This is true whether the mind is trying to come to grips with painful reality, reacting to trauma, coping with the everyday or just making things up. Freud called this imaginative activity phantasy, and he argued both that it functions unconsciously and that it plays a powerful role in the organization of a person’s experience. This surely, contains the seeds of a profound insight into the human condition; it is the central insight of psychoanalysis … a pervasive aspect of mental life …. Are we to see humans as having depth—as complex psychological organisms who generate layers of meaning which lie beneath the surface of their own understanding? Or are we to take ourselves as transparent to ourselves?” Jonathan Lear, Open Minded: Working Out the Logic of the Soul.