The Basic Model in Outline

The starting point of my analysis, and central to all that follows, is individual behaviour. I am concerned to try and determine, so far as possible given our present state of knowledge, what factors determine the actions of individuals, and how they arrive at their decisions. Unlike standard economics, however, I do not envisage individuals as living very largely in a vacuum, with their actions determined by forces somehow detached from the very strong social influences which surround their daily lives. More-over, individuals not only take decisions on their own, they also participate in institutions, where their actions and decisions are generally taken in consort with other individuals. Together, decisions taken by individuals on their own behalf, and those taken in conjunction with others, or on behalf of others, make up aggregate behaviour. All these decisions are taken within an environment which is part given, to the extent that we cannot influence it, and part itself a consequence of the actions of men and women. The broad structure described is set out in Figure 2.1. I will go on now to say a bit more about the five main components of the model, and how they interlink. Each will be discussed at much greater length in the chapters which follow.