Joost Hengstmengel
Journal of Economics, Theology and Religion, vol. 5, no. 1 (2025): 9-25
Abstract
Homo economicus has justly been identified as the universal bogeyman of economics. Economic man, having been showered with criticism for a century and a half, continues to occupy critics to this day. Plenty of economists in the previous century have proclaimed the death of homo economicus and attempted to go beyond it. Interestingly, some Christians have argued that the agent inhabiting economic models comes close to a realistic description of fallen man. This article investigates this claim by raising the question if homo economicus can be seen as a sinner. It starts by defining sin as disordered love and then proceeds to distinguish three different homines economici: homo avarus, homo economicus proper, and homo rationalis. It then subjects these views of man to a combined historical and hamartiological analysis. I conclude that all three views exhibit moral shortcomings and in their own way can be seen as sinful. Fortunately, redemption from evil is possible.
Keywords
homo economicus, economic man, sin, self-interest, love
Publication history
First view: 6 February 2025
Published: 20 May 2025
1. Introduction
“The deep structure of modern economics, viewed from theology, is, so to speak, Augustinian. People are born in sin (that is, greed). By the grace of God, and of market forces, the sin is transformed into social good” (McCloskey 2004, 313)
Lionel Robbins, author of one of the most influential economic texts of the twentieth century, once characterized homo œconomicus as the “universal bogey” of economics (Robbins 1932, 90; cf. Machlup 1972). And he is right in doing so, for ever since the professionalization of economics in the later nineteenth century there has been an incessant criticism of this figure from both within and outside the science. What started with the attacks of the German Historical School, which criticized its unrealistic nature (Wolff 1926; Fey 1936), resulted in various proclamations of the “end” of economic man and attempts to go “beyond” it in the next century. Time and again, critics of homo economicus accused its advocates of employing an unrealistic and inadequate view of man, which fails to grasp the complexity and multidimensionality of the human being, even or especially in his (never a “her”) economic interactions. This insistence on homo economicus would not be such a problem, the bogeyman’s enemies argue, if it did not have negative consequences. At best it makes economics a useless science; at worst, people in the world outside start to behave accordingly (on this education effect, see for example Frank, Gilovich, and Regan 1993).
Economists in the tradition of Reformed Christian economics (Goudzwaard and Jongeneel 2014) have usually joined in the chorus of critics. Perhaps one of the sharpest attacks came from Dutch economist Roelf Haan, who reasoned that this image of man is “utterly incompatible with biblical anthropology and theology” (Haan 1988, 233). A Christian economic thinking, he believes, must concentrate on man as a relational being created in the image of God, and not on this creature that can be considered to be a product of secularized Puritan anthropology. Haan’s position is in line with that of P. A. Diepenhorst (1879-1953), the first professor of economics at the Vrije Universiteit Amsterdam, an institution of Neo-Calvinist learning (Hengstmengel 2024b). A sympathizer of the historical approach, Diepenhorst listed the assumption of economic man among the greatest fallacies of the classical school of economics. He likewise argued that in the center of economic analysis should stand man, created after God’s image.
Quite remarkably, Diepenhorst’s intended successor at the Vrije Universiteit—Jan Ridder (1910-1946), who died far too early—argued that the front on which Christian economists had to fight was elsewhere (Hengstmengel 2024a). Ridder believed that the figure of homo economicus was close to the truth in a fallen world; he also maintained that it would soon disappear from economic theory. Trained at the Rotterdam School of Commerce (Nederlandsche Handels-Hoogeschool) around 1930, where he was strongly influenced by his positivistic teacher F. de Vries, Ridder made a strict distinction between theoretical economics and political economy. Whereas the latter had to be realistic and based on Christian principles, the former could work with any assumption that yielded explanatory power. Homo economicus was just such an assumption—one with more truth to it than most people cared to admit.
Ridder made this case in a 1931 article that he wrote as a doctoral student.[1] Explicitly correcting Diepenhorst, Ridder explained that while the pernicious assumption that man is reducible to a selfish being cannot be adopted by Christian political economists, the role of self-interest in human behavior should not be underestimated, either. While post-classical economists such as Karl Knies and Carl Menger were right that people are as well driven by a sense of community, justice, and charity, nothing is so dear to man as his private interest, “something no one, certainly not on the Reformed side, will contradict. (…) It is a consequence of sin that the engine of self-interest pulls harder than is permissible to God’s will but therefore no less true, on the contrary” (Ridder 1931, 414). In twentieth-century economic theory, however, the idea of self-interest hardly played a role anymore, according to Ridder. With his Rotterdam teacher and the Austrian economist Richard von Strigl, he established that theoretical economics had become the science that studies choice under scarcity. If self-interest—or religion, morality, and justice for that matter—influenced “the economic problem,” it was because of people’s self-interested preferences for certain ends and means (Ridder 1931, 422ff).
In a later article dealing with the history of homo economicus, Ridder felt compelled to adjust his expectations. Homo economicus, as the embodiment of ideal economic behavior, had not disappeared from the scene, after all. “It seems,” he quoted F. A. von Hayek, “that the skeleton in our cupboard, the ‘economic man’, whom we have exorcised with prayer and fasting has returned through the backdoor in the form of a quasi-ominscient [sic] individual” (Ridder 1942, 126). When fighting homo economicus, however, it was important to acknowledge the evolution of his character in the work of successive generations of economists. Ever since the mid-nineteenth century, classical homo economicus has been showered with criticism—and not unjustifiably so. Yet his critics should not be too quick in their judgments, considering Jesus’s words “he who is without sin among you, let him throw a stone at [him] first” (John 8:7). A careful contemplation of classical homo economicus, Ridder preached, shows that he resides in each of us. He is our likeness, as we are naturally inclined to hate God and our neighbor. And according to the sixteenth-century Heidelberg Catechism, this “economic ‘old man’” needs to die away first before a “new man” can rise to life (Ridder 1941, 129).
Between the lines of this pastoral admonition with which we conclude the discussion of Ridder’s view, there is an interesting suggestion that links homo economicus to the Fall of Man (as taught by Christian theology). Man, as we know him, is not the man originally intended by God: rather, having fallen into sin, man became morally corrupted. Now what Ridder suggested is that the construct of (classical) economic man comes close to a realistic description of man in the fallen state.[2] In contemporary discussions we sometimes find similar observations. Economics, Edward Skidelsky writes in a book review, is “the science of fallen man.” Despite the shortcomings of the homo economicus model, to the author of the book it remains “a tolerably good representation of the behavior of most people in our sinful world” (Skidelsky 2020). Others have portrayed economic man as a fallen being who stands in need of redemption (Heyne 2008; Tatum 2017).
This raises the question, addressed in this article, if the agent employed by economists is a homo peccatus (sinner) indeed. Can he be seen as peccator and, if so, in what sense? Of course, no sensible answer can be given to this question without first asking who homo economicus is, and what sin is. As theologians know and economists will surmise, to define sin is a challenging task. In theology there many different definitions around, some more metaphysical or legalistic, others of a more relational nature (van der Kooi and van den Brink 2017, chap. 8). For the sake of argument and for this purpose alone, in this article “sin” is seen as “disordered love.” According to Jesus Christ in the Gospels, “You shall love the Lord your God with all your heart, with all your soul, and with all your mind. This is the first and great commandment. And the second is like it: You shall love your neighbor as yourself” (Matthew 22:37–9; cf. Mark 12:30–1; Luke 10:27). The Great Commandment of Christianity thus requires love of God, love of neighbor or “charity,” and love of self or “self-love.” The latter term may be equated with “self-interest,” which historically came to replace it (see Force 2003; Maurer 2019). Sin, then, can be defined as the neglect of one of these objects of love or, conversely, an absolutization of one love at the expense of the other two.[3]
Note, when it comes to defining homo economicus, the devil is in the details. The history of the universal bogey is much longer and more varied than what is sometimes suggested. The further we go back in time, the more it is a “secret” story (Holmes 1990) that has yet to be revealed. What such a revelation shows us is that there is no such thing as the homo economicus. In fact, in the history of economic thought three homines economici have been around—of which only one can properly be labelled homo economicus. To avoid confusion, its forerunner and successor may better be termed homo avidus (avaricious man) and homo rationalis (rational man), respectively. In the remainder of this article, the genesis and development of the economic view of man in his three guises will be discussed in more detail. This historical exercise is combined with hamartiological review meant to establish if the homines in question can be seen as sinners.[4]
2. Homo avidus
It would seem that the forefather of homo economicus is seventeenth-century Hobbesian man. In Wilson’s and Dickson’s A History of Homo Economicus, the English Renaissance writer Thomas Hobbes is one of the key figures. “In the beginning,” they write, “there was the calculating ego, the rational maximiser, that dominates Hobbes’s Leviathan” (Wilson and Dixon 2012, 9). The authors approvingly refer to Myers (1983), who also placed him in front of his study of the evolution of self-interest as the “soul of modern economic man.” Anticipating eighteenth-century writers such as Bernard Mandeville, Hobbes depicted man in the natural state as a thoroughly selfish being moved by self-interest—as a “knave,” as the Scottish philosopher-economist David Hume would call it. Despite attempts to replace the Hobbesian view with a more-dimensional man, Wilson and Dickson argue, modern economists eventually came to adopt it. Modern economics ended up being a “Hobbesworld” inhabited by atomic Hobbesian rational maximizers that lack moral capacity. Although the authors quote Hobbes (28) saying that man’s desires and the actions resulting from them “are in themselves no sin” unless there is a law that forbids them, they have an altogether different prospect of heaven on earth.
The problem with conceiving Hobbesian man as some sort of predecessor of homo economicus is that the author of Leviathan was no political economist—as Wilson and Dickson acknowledge. As head of the so-called “selfish school,” Hobbes definitely influenced economic discourse in various ways; strictly speaking, however, his view of man does not belong to the history of economic theory. What is more, similar views were already expressed within political economy thinking one hundred years before. While Hobbes expressed an already existing sentiment, Sir Thomas Smith (1513-77) may be considered to be the inventor of this economic anthropology. His early mercantilist dialogue, A Discourse of the Commonweal of This Realm of England, written in 1549, has been classified as the high point of Tudor economic thought. It contains the following generalizations:
Every man will seek where most advantage is;
Every man naturally will follow that wherein he sees most profit;
Every man … is naturally covetous of lucre and that wherein they see most lucre they will most gladly exercise.
According to Smith, the natural avarice of man is the main drive behind enclosures, which he regarded as an important cause of England’s economic decay. In his Augustinian conception of fallen man, the solution is not to eradicate avarice. For “can we devise that all covetousness may be taken from men? No, no more than we can make men to be without ire, without gladness, without fear, and without all affections” (cited in Wood 1997, 32, where also the earlier quotes can be found). Instead of prohibiting enclosures, lawgivers could better regulate them—and harness avarice for the common good.
Smith’s homo avidus was not unique to his age. A cautious appraisal of the social utility of avarice was already present in Italian Renaissance thought from the late thirteenth century onwards (McGovern 1970). While Smith was a pioneer of political economy, his avaricious man was hardly unique to early mercantilism. Various sixteenth- and early-seventeenth century English writers on political economy took for granted that people—or at least the merchants that are central in their analyses—are driven by “gain,” “profit,” “lucre, ”or “advantage”—if necessary, at the expense of the commonwealth.[5] The homo avidus served as an axiom in their pamphlets and tracts: i.e., as a truth that governments must take into account in their economic policies. The economy was increasingly seen as an interplay of self-interested individuals that required steering for the common good. “Economic individualism” was on the rise (Robertson 1933, chap. 3; Chalk 1951).
The renowned historian of economics Jacob Viner indeed stated that economic man was not an invention of the classical economists but of the early mercantilists (Viner 1937, 92–94). One difference, he observed, is that while the classical school of economics applauded man’s unlimited desire for wealth, mercantilism feared the avarice of merchants, which could ruin the national interest. One should add that homo avidus was meant to be a realistic view of man rather than a convenient scientific assumption. The new realism about man—that it is better to start from how people are than from what they should be—was typical for Renaissance moral philosophy, and resulted in a lively debate on “the passions and the interests” (Hirschman 1977). The outcome of this debate was that economic self-interest (or “self-love,” in older jargon) and even greedy money-making came to be seen as acceptable passions, which were deemed less dangerous than the pursuit of honor and glory. Avarice turned from being a deadly sin into being a social benefit (Verburg 2012; 2018; Poley 2016), an idea that reached a climax in Mandeville’s tiding of greed-is-good.
The fact that even the author of the Fable of the Bees continued to call avarice with Paul the Apostle (1 Timothy 6:10) the “root of evil” suggests that homo avidus is nevertheless a fallen creature. Even if it is true that “private vices” like greed may be providentially turned to “public benefits,” as the subtitle of the Fable has it, it does not stop avarita from being one of the seven deadly sins. As the Christian tradition of virtue ethics recognizes, the problem with avarice is that it prioritizes self-love at the expense of caritas, the virtue that includes love of God and love of neighbor. An excessive or insatiable desire for wealth, avarice is likely not only to harm others, but also to endanger one’s own “soul”—which can be loosely defined as people’s long-term welfare. In unmasking homo avidus as homo peccatus, we should be careful to measure all early mercantilists by the same yardstick, though. As the Dutch poet Jeremias de Decker established in his Erasmian Praise of Avarice (Lof der geldsucht, 1667), quoting theologian William Amesius, non quaelibet divitiarum concupiscentia avaritia est: not all lust for money is greed. In fact, he adds, everyone is obliged and bound to a lawful and moderate pursuit of money. In mercantilist writings where this prudent man is central rather than the insatiable sinner, it would be unjust to read sin into it, indeed.
3. Homo economicus
The birth of what I prefer to name the real “homo economicus” is well-documented (e.g., Persky 1995; Cremaschi 1998).[6] This economic model of man was first created in the classical school of economics by John Stuart Mill—in an article from 1836, to be exact. Political economy, Mill establishes,
does not treat the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging the comparative efficacy of means for obtaining that end. It predicts only such of the phenomena of the social state as take place in consequence of the pursuit of wealth.
He continues to explain that the young science ignores other passions than the desire for wealth, except that is from two counter motives that always accompany it: man’s aversion to labor and his love of luxury consumption (from acedia,sloth, and luxuria, lust, or gula, gluttony, theologians schooled in the Christian tradition of seven deadly sins would say).
It makes entire abstraction of every other human passion or motive; expect those which may be regarded as perpetually antagonizing principles to the desire of wealth, namely aversion to labour, and desire of the present enjoyment of costly indulgences.
Political economy furthermore considers people as restless wealth-maximizers. It studies what would happen if the one positive and two negative motives were “absolute ruler of all their actions.” Mill was quick to add that no economist “was ever so absurd as to suppose that mankind are really thus constituted” (Mill 1837, 12–13). Economics is an abstract science in search of economic laws, and therefore cannot function without such a simplification of reality.
Before Mill wrote down these memorable words, homo economicus did not exist. Earlier representatives of the classical school based their theories on a much richer psychology. For example, Adam Smith claimed that humans are simultaneously driven by a propensity to truck and barter, a desire to better their condition, and a desire to be esteemed and admired. The Reverend Thomas Malthus reasoned from a combination of rationality, self-love, and sexual instincts. An exception to the non-existence of homo economicus, perhaps, was the view of man adopted by Smith’s compatriot James Steuart, who was a moderate mercantilist rather than proto-classical author. His An Inquiry into the Principles of Political Economy (1767) is based on the “supposition” and “principle” that man’s behavior in the public sphere is based on a private interest motive. Like Mill, Steuart qualifies the use of this assumption by stating that there is more to real people. While political economy focuses on one “ruling principle,” human behavior is in reality determined by a mixture of self-interest, expedience, duty, and passion.
Mill and John Cairnes, who adopted his view, never used the term “homo economicus” or “economic man.” The phrase was coined and popularized by critics of the classical economists, who included Victorian moralists, proponents of Christian political economy, and supporters of the German Historical school, in the late 1870s and 1880s. Recent research (Bee and Desmarais-Tremblay 2023) has traced the first use of the phrase “economic man” to an 1874 review of Cairnes by the American economist Francis Walker, and “homo economicus” to an 1878 journal contribution by the French Catholic economist Claudio Jannet. Walker simply observes that, in his later work, Mill was not faithful to his own definition of economic man and began to assume other motives and passions. In a more critical fashion, Jannet claims that homo economicus “is like Rousseau’s natural man: it never existed!” The latter, pejorative connotation became dominant as criticism of the English (classical) school of political economy grew. The figure of economic man was increasingly characterized as selfish and detached from his social environment. That Mill and Cairnes did not attribute these two properties to the subjects inhabiting the economic world was conveniently concealed.
The less polemical contributors to the so-called Methodenstreit in the late 1870s and 80s between (mostly English) deductionists and (mostly German) inductionists gave a fairer picture of Mill’s abstract creature. Realizing that economic man served as simplifying assumption, advocates of the German historical approach nevertheless found the “dollar-hunting” (Charles Devas) or “money-making animal” (John Ingram) too individualistic. Walter Bagehot, in turn, defended the “economical man” (sic) in his “Preliminaries of Political Economy” (1876), while granting the assumption did not fit savages but civilized men in commercial societies. Political economy, as he summarized the English methodology,
deals not with the entire real man as we know him in fact, but with a simpler, imaginary man. … The abstract man of this science is engrossed with one desire only–the desire of possessing wealth … because it is found convenient to isolate the effects of this force from all others. … The use of the primitive assumptions of Political Economy is to show how the greatest of all industrial desires–the desire to obtain wealth would operate, if we consider it as operating, as far as we possibly can, by itself.
The economists, as he explained two pages later,
did not mean (and rightly did not mean) to deal with ethics at all. They only evolved an hypothesis; they did not intend that their arguments should be thought to be taken from real life, or that their conclusions should be roughly, and as they stood, applied to real life. They considered not the whole of actual nature, but only part of it. They dealt not with man, the moral being, but with man, the money-making animal (Bagehot 1880, 74, 77).
To the classical economists who employed him, homo economicus was a working hypothesis—nothing more and nothing less. It may therefore seem somewhat contrived to put a being, which according to its creators did not exist at all, on a hamartiological scale. All the same, we might ask if the man envisioned by this hypothesis is a fallen man—if only for those who claim that economists actually believe in his existence. As we have established with the homo avarus, money-making is not a sin per se. That would imply that also homo economicus desiring wealth goes free, if it were not for the fact that, according to Mill, cum suis this desire rules all his actions. A ubiquitous, never-cooling love of money or goods is certainly at odds with other objects of love, including God and our fellows. Dr Samuel Johnson would have famously said that there are “few ways in which a man can be more innocently employed than in getting money.” That may be true if we compare the quest for wealth with greater evils, as Johnson is likely to have done as an eighteenth-century intellectual. But the problem is that people possessed by the desire for wealth tend to forget the O/other. That said, we should not rule out the possibility that homo economicus yearns for money to spend it well. Mill’s colleague Nassau W. Senior, who incidentally criticized the assumption of unlimitedness, stressed that its possessor “may satisfy at will his ambition, or vanity, or indolence, his public spirit or his private benevolence” (Senior 1836, 139). Seen in this way, man is free to sin or do good.
4. Homo rationalis
In the twentieth century, homo economicus was succeeded by homo rationalis. In the terminology of Dutch economist P. Hennipman (1945), economic man was no longer primarily defined in terms of an “economic motive” or goal such as maximalization of money or wealth, but an “economic principle,” i.e. the way in which these and other ends are pursued. Typical of the new homo economicus—which I term homo rationalis!—was his rationality—or, better yet, his rational way of making choices. This metamorphosis came in three steps (cf. Morgan 1996; 2006; 2012, chap. 4; Vromen 1998).
In the first place, the objective aim of wealth made way for the subjective aim of satisfaction or utility. Mill’s economic man already marked a shift from a science that studies the production and distribution of wealth to a science focusing on the wealth-seeker. His turn towards the economic subject, and the attempt to base political economy on “mental” laws, was radicalized by economists who helped to launch the Marginal Revolution in the later nineteenth century. Combining Mill’s methodological individualism with utilitarianism, William Stanley Jevons developed the idea of a “calculating” or “choosing man,” the direct ancestor of the rational economic man discussed later in this section (Morgan 1996, 7; 2006, 11). Jevons’s economics features a calculating consumer who seeks to maximize utility from consuming goods and services. If he is self-interested or egoistic, it is because he derives “pleasure”—measured in terms of duration and intensity—from consumption, not simply from acquiring and possessing wealth. In a Millian vein, Jevons argues that economics does not treat all human motives, only the ordinary feelings of pleasure (utilities) and pain (disutilities). “There are motives nearly always present with us, arising from conscience, compassion, or from some moral or religious source, which economy cannot and does not pretend to treat” (Jevons 1866, 282). According to Jevons, these must be treated by other sciences, thus suggesting that economics cannot say anything meaningful about sin.
Next, the psychological turn caused by Jevons and others was once again reversed around the turn of the century. The main economist responsible for this was the Italian Vilfredo Pareto. Initially seeking to develop Jevons’s hedonistic approach, Vilfredo Pareto concluded that economics could do without psychological assumptions altogether. Nothing forced the economist to worry about people’s motives of action, and to make sense of the seemingly incongruous behavior of altruists and ascetics, who scored low on pleasure. They could simply study actual choices, or the way in which scarce means are linked to a multitude of ends. Rather than as a Jevonian “pleasure machine,” as Jevons’s disciple Francis Edgeworth termed it, homo economicus could be seen as a machine making choices. As was to be expected, Pareto, too, qualified his choice machine-view by stating that people of flesh and blood were more complex than that. Economics only highlighted one aspect of being human. “The same man, whom I consider as a homo œconomicus for an economic study, may be considered as a homo ethicus for a moral study, as a homo religious for a religious study” (quoted in Bee and Desmarais-Tremblay 2023, 20). Note that the term homo economicus acquires a positive meaning here, and the problem of sin once again was outsourced to ethicists and theologians.
The economist to deliver the final blow to economics as the science of wealth was Lionel Robbins. His famous Essay on the Nature of Economic Science quoted at the very beginning of this article completed the transition from the classical concern with wealth to a neoclassical focus on choice under scarcity. Robbins’s definition of economics as the study of human behavior as a relationship between means and ends is etched in the memory of every economist. Less known is his reply—to be found in a section titled, “The Mythology of Homo Œconomicus”—to the accusation that economics studies a world full of self-interested, money-making animals:
The general absurdity of the belief that the world contemplated by the economist is peopled only by egotists or “pleasure machines” should be sufficiently clear from what has been said already. The fundamental concept of economic analysis is the idea of scales of relative valuations; and, as we have seen, while we assume that different goods have different values at different margins, we do not regard it as part of our problem to explain why these particular valuations exist. We take them as given data. So far as we are concerned, our economic subjects can be pure egoists, pure altruists, pure ascetics, pure sensualists or—what is much more likely—mixed bundles of all these impulses (Robbins 1932, 87).
According to Robbins, the science of economics as it developed over the 60 years prior to his Essay is characterized by ethical neutrality. It is not concerned with people’s ends as such, nor with their valuations based on them and the means to be deployed. That responsibility has been delegated to ethics. “Economics deals with ascertainable facts,” Robbins claims, “ethics with valuations and obligations.” No wonder, then, that according to Robbins, “sin” is a meaningless term to economists. His—in the context of this article very appropriate—example concerns paid love. The service of prostitutes may be conceived of as bad in an ethical sense, Robbins concedes. But the economic aspect of hired love, i.e., the fact that it is scarce, makes it a subject worthy of economic study (Robbins 1932, 132, 27).
The final step in the fashioning of homo rationalis was the attribution of rationality to the choosing man. In a sense, classical homo economicus was never completely without “intellectual power,” as Cairnes called it. According to Mill, his brainchild not only tried to maximize wealth but also was “capable of judging the comparative efficacy of means” for obtaining it. Pareto’s choice machine made his choices “logically” as well, in the sense that the actions that it proposes were goal directed. Robbins, finally, argued that economics cherishes the ideal of “rationality in choice.” Even though it does not assume that people’s valuations and actions are necessarily rational, the science exists by the grace of showing that rationality is desirable. Choosing man was no rational man yet. In the meantime, however, economists such as Frank Knight had begun to endow man with full rationality. It was just one of the “heroic” abstractions of his imaginary society.
We assume that members of this society act with complete ‘rationality.’ By this we do not mean that they are to be ‘as angels, knowing good from evil’; we assume ordinary human motives but they are supposed to ‘know what they want’ and to seek it ‘intelligently’. … They are supposed to know absolutely the consequences of their acts when they are performed, and to perform them in the light of the consequences (Knight 1921, 76–77)
The qualities of perfect knowledge and foresight were, of course, not added to make the construct realistic, but rather to make the angelic hero fit for mathematical models. Rational man, the inhabitant of the economic world that chooses rationally, was born.
Over the course of the twentieth century, homo rationalis received several additional updates. His deliberations were formalized and idealized in rational choice theory, which prefers the language of preferences and constraints over that of ends and means. It assumes that “economic agents” have complete and consistently ordered preferences, perfect information, and full (computing) rationality to make choices that maximize utility—max(U). Other innovations included the addition of uncertainty and risk (Knight), revealed preferences as an alternative for mental preference orderings of choices (Paul Samuelson), and satisficing behavior instead of maximizing behavior (Herbert Simon). There is no need to elaborate on these refinements of the rational view of man here. Nor do the corrective slaps given by game theory, experimental economics, and behavioral economics in the later decades of the century require our attention. The upshot is that the “science of choice” after Pareto and Robbins started to assume a rational, utility-maximizing agent, whose utility can hardly any more be compared on an interpersonal basis and whose rationality is of a rather limited kind. In the famous words of Amartya Sen, the being featuring in economic models is a “rational fool” and “social moron” who is consistent in his choice behavior but unable to do justice to the social and ethical dimensions of life (Sen 1977).
Among economists now and then, there is hopeless disagreement about whether and to what extent homo rationalis is self-interested—or self-regarding, selfish, egoistic (cf. Hands 2021). The thing is, that the term does not have a uniform meaning. Moreover, enthusiasts of the max(U) approach to human behavior have always been at pains not to rule out altruism. Individuals may be seen as self-interested in the sense that they wish to see their preferences satisfied, but this is not to say that the preferences themselves cannot be other-regarding. This point of contention about egoism and altruism is of course directly relevant to the question of sin. Few would claim that it is sinful to have preferences—some of them self-interested, to order them rationally given constraints, and to strive for maximum utility. Moreover, if perfect information and foresight are assumed, these more closely resemble godlike traits than moral shortcomings. The most relevant considerations, namely people’s concrete preferences and the constraints that they face, are external to the model. Ethical considerations are datum, and principally beyond the economist’s reach. In that sense, Dutch economist Jan Ridder was right that homo rationalis as such cannot be considered as sinful.
However, one may well wonder if rational choice theory-like models that allow for other-regarding considerations in the sphere of external data do not have a sinful orientation, after all. Even if they work with so-called interdependent preferences, they remain exclusively self-focused: the ultimate measure is the decision-maker’s utility (cf. Hodgson 2013, 10). Questions of moral good and moral evil, of sin and obedience if you like, are in the end reduced to a utility maximization problem faced by the individual agent. With this focus on private utility, which then serves as an explanation of charitable and religious behavior, the “interest” of God and the neighbor inevitably become matters of secondary, derivative importance. Rational economic man can very well have preferences that express his love of God and the other, but only because their expected utility is positive to him. In other words, one way or another, private utility—however defined—becomes the measure of all things. It is fair to say that we are dealing with a mathematical assumption here, which derives its popularity from the fact that it is easy to model. But all the same, it makes for an individualistic and utilitarian core of contemporary economics that leaves little room for a richer anthropology that spans sinners and saints.
5. Conclusions
This article has subjected the economic view of man to a religious examination. We first found that it is important to differentiate between three such views, and then to distinguish homo economicus from the earlier homo avarus and later homo rationalis. While the pecuniary love of homo avarus and homo economicus is nearly indistinguishable, the latter is explicitly meant as a scientific assumption rather than as a realistic starting point. This makes homo avarus a greater threat to humanity, although one may well wonder whether early modern writers on economics did not have too gloomy a view of man’s aspirations. Homo rationalis, in turn, is principally freed from the said love of money and is eager to choose what he desires—be it wealth, abstinence, or doing good. Unlike his two forefathers, what qualifies this view of man as economic is not the motive of wealth, but the principle of rationality as manifested in his preference orderings and choices. This transfiguration of the economic subject from homo avarus to homo rationalis is part of a broader story of economics evolving from a science of avarice to a science of wealth and a science of choice (Kirzner 2009). In term of mental content accessible to the economist, however, it can be seen as the “striptease of a persona non grata” (Vromen 1998 dixit). Man’s aspirations and rationality assumed less and less substance.
When it comes to the question of sin, which we defined in terms of disordered love, we concluded that all three constructs exhibit moral shortcomings. Whereas homo avarus is by definition sinful, homo economicus basically falls for the same temptation. For if the desire for wealth rules all his actions, as Mill assumed for methodological reasons, this is another way of saying that this agent is unsatiable. And theologically speaking, to turn Gordon Gekko’s statement in the 1987 movie Wall Street upside down, “Greed is not good. Greed is not right. Greed does not work.” Unless there are charitable purposes involved, the love of money usually competes with the love of God and neighbor. With the incarnation of homo rationalis, the scope for doing good seemed to increase. Since economists studiously refrain from statements about their content, the preferences of rational economic man may be both thoroughly other-regarding and fully rational. The theological downside, however, is that rational choice models are preoccupied with the individual agent’s utility. The agent would not prefer something if it did not yield him the prospect of a positive utility. Homo rationalis may expect long-term benefits from his love of God and may receive a warm feeling from his love of his neighbor, but that has little to do with the Christian idea of self-sacrificing love (caritas).
Having reached the end of this contribution, we again turn to Jan Ridder, who inspired us to embark on this historical journey. If his all too short life has contributed anything to our thinking about the relationship between economics and theology, it is his attempt to give sin a place in economics. In a posthumous contribution, Ridder argued that sin enters economic life through the scales of preferences of economic subjects. The sanctification of economic life that God calls for therefore starts with personal conversion. It requires “sanctifying the scales of preferences” themselves (Ridder 1948, 125, 127). The problem, he observed long before the rise of behavioral economics, is that people suffer from bounded rationality, bounded morality, and bounded willpower. Realizing this—and taking appropriate measures—is the challenge for economists and policymakers, then and today.
What can be helpful, I believe, is the development of richer economic models of decision making that give sin (or secularized variants such as moral and intellectual defects) an explicit place (cf. Hollis 1981). Gaining insight into sin is necessary, after all, to achieve moral improvement. Some work has been done in this direction in the field called “economics of sin”—for example, by developing multiple utility models and introducing the idea of preference pollution. However, as the author of The Economics of Sin (2003) concludes, the notion of sin in rational choice models almost never resembles sin as we know it (Cameron 2009, 498). Hence we see the need for further reflection on how sin in all its complexity can be incorporated into existing rational choice models. A continuation of the conversation between economics and theologians can contribute to this.
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Notes
[1] His views were so controversial in Reformed circles that the editors decided to add a footnote stating that by placing the piece they in no way fully agreed with its contents.
[2] An echo of this view can be found in the views of Christiaan Smeenk, a Dutch writer on socioeconomic questions: “in theoretical economics, as in economic policy, we have to reckon with the fact that man is a sinner. Self-preservation and the development of all strengths and abilities may not be wrong in itself, but there is a great danger that man will think too much of himself or, more broadly, of his own family, and not care enough about the rights and interests of others, or the welfare of the community to which he belongs. It is a sin that all too often the engine of one’s own interest pulls stronger than is permissible, but it is no less a fact. Christians, with their profound conception of sin, who think pessimistically about man, can hardly maintain that theoretical economics is too far removed from reality when it considers the driving force of self-interest to be of great importance” (Smeenk 1934, 71–72).
[3] This working definition rules out other dimensions such as the noetic effects of sin, from which an interesting comparison with the economic view of man could be made as well.
[4] Throughout I benefited from P. Hennipman’s invaluable book Economic Motive and Economic Principle (1945). For a full history of homo avidus and homo economicus, Dutch readers may also turn to Hengstmengel (2020). I would like to thank the two anonymous reviewers for their constructive comments on a previous version of this article.
[5] Grampp 1952, 482, 486; 1981, 126–27; 1993, 62–66; Ferguson 1965, 282–313, 345–61; Appleby 1978, 94–95.
[6] I have not been able to consult von Zwiedineck-Südenhorst (1934).
