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Restraining the genuine homo economicus: why the economy cannot be divorced from its governance

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  • Skaperdas, Stergios

Abstract

The Homo economicus of traditional economics is far from being completely self-interested, rational, or as individualistic as he is purported to be; he will haggle to death over price but will not take what he wants by force. Implicitly, he is assumed to behave ruthlessly within a well-defined bubble of sainthood. Based on a simple model, I first examine what occurs when this assumption is relaxed and genuine, amoral Homines economici interact. Productivity can be inversely related to compensation; a longer shadow of the future can intensify conflict; and, more competition among providers of protection reduces welfare. The patently inefficient outcomes that follow call for restraining self-interest, for finding ways to govern markets. I then review some of the different ways of creating restraints, from the traditional social contract, to the hierarchical domination of kings and lords, to modern forms of governance. Checks and balances, wider representation, the bureaucratic form of organization, and other ingredients of modern governance can partly be thought of as providing restraints to the dark side of self-interest. Though highly imperfect, these restraints are better than the alternative, which typically involves autocratic, amateurish, and corrupt rule. Then, thinking of most problems in terms of a first-best economic model is practically and scientifically misguided. -- Der Homo Economicus der klassischen Wirtschaftswissenschaften ist dadurch gekennzeichnet, dass er zwar bis in den Tod um Preise feilscht, sich aber niemals Dinge mit Gewalt aneignen würde. So betrachtet ist er nicht in jeder Hinsicht vollständig eigennützig und rational oder individualistisch. Diese Eigenschaften treffen nur auf eine Dimension seines Verhaltens zu, nämlich auf sein Verhalten im Marktgeschehen. In Hinblick auf das Respektieren von Eigentumsrechten verhält sich der Homo Economicus geradezu wie ein Heiliger. Basierend auf einer einfachen Analyse wird in der Arbeit untersucht, welche Konsequenzen die Lockerung dieser Annahme hat. Die Interaktion solcher nunmehr wirklich eigennütziger Homines Economici hat verschiedene Implikationen. Beispielsweise kann eine besonders hohe Produktivität eines Akteurs dazu führen, dass er eine besonders niedrige Entlohnung erhält. Auch kann die Möglichkeit zukünftiger Verhandlungen Konflikte in der Gegenwart verschärfen. Ferner wird ein stärkerer Wettbewerb zwischen Akteuren, die den Schutz von Eigentumsrechten anderer als Dienstleistung anbieten, die Wohlfahrt senken. Solche Ineffizienzen können dazu führen, dass es allokationspolitisch sinnvoll ist, den Eigennutz zu zügeln und Märkte zu regulieren. In der Arbeit werden verschiedene Möglichkeiten geprüft, solche Beschränkungen zu schaffen, vom traditionellen Gesellschaftsvertrag über die hierarchische Herrschaft von Königen und Adligen, bis hin zu modernen Regierungsformen. Checks and Balances, die umfassende Repräsentation, die bürokratische Organisationsform und andere Elemente des modernen Regierens können teilweise für Beschränkungen der dunklen Seite des Eigennutzes sorgen. Obwohl solche Formen der Beschränkung nicht sehr wirkungsvoll sind, sind sie gegenüber ihren Alternativen überlegen, die typischerweise mit autokratischer, amateurhafter und korrupter Herrschaft einhergehen.

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Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2003-03.

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Date of creation: 2003
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Handle: RePEc:zbw:wzbmpg:spii200303

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Keywords: Conflict; property rights; governance;

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Cited by:
  1. Horatiu A. Rus, 2012. "Environmental Depletion, Governance, and Conflict," Southern Economic Journal, Southern Economic Association, vol. 78(4), pages 1305-1332, April.
  2. Michelle R. Garfinkel & Stergios Skaperdas, 2006. "Economics of Conflict: An Overview," Working Papers 050623, University of California-Irvine, Department of Economics, revised Sep 2006.
  3. Edgardo Barandiarán, 2003. "Protecting Property from Stationary Bandits," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 626-632.
  4. Michelle R. Garfinkel, 2003. "On the Stability of Group Formation: Managing the Conflict Within," Public Economics 0312005, EconWPA, revised 04 Mar 2004.
  5. Helmut Bester & Kai A. Konrad, 2005. "Easy Targets and the Timing of Conflict," Journal of Theoretical Politics, , vol. 17(2), pages 199-215, April.
  6. Münster, Johannes, 2008. "Repeated contests with asymmetric information," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-08, Social Science Research Center Berlin (WZB).
  7. Münster, Johannes, 2004. "Simultaneous inter- and intra-group conflicts," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 4, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  8. Konrad, Kai A., 2004. "Bidding in hierarchies," European Economic Review, Elsevier, vol. 48(6), pages 1301-1308, December.
  9. Ashish Chaturvedi, 2005. "Rigging elections with violence," Public Choice, Springer, vol. 125(1), pages 189-202, July.
  10. Münster, Johannes, 2005. "Simultaneous inter- and intra-group conflicts," Discussion Papers, Research Unit: Market Processes and Governance SP II 2005-08, Social Science Research Center Berlin (WZB).
  11. Lagerlöf, Nils-Petter, 2013. "Violence and property rights," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 312-328.
  12. Konrad, Kai A., 2007. "Strategy in contests: an introduction," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, Social Science Research Center Berlin (WZB).
  13. Münster, Johannes & Staal, Klaas, 2005. "War with Outsiders Makes Peace Inside," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 75, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  14. Johannes Münster, 2007. "Simultaneous inter- and intra-group conflicts," Economic Theory, Springer, vol. 32(2), pages 333-352, August.
  15. Leeson, Peter T. & Nowrasteh, Alex, 2011. "Was privateering plunder efficient?," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 303-317, August.
  16. Lagerlöf, Nils-Petter & Tangerås, Thomas, 2005. "Human Capital, Rent Seeking, and a Transition from Stagnation to Growth," Working Paper Series 656, Research Institute of Industrial Economics.

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