FROM HOMO OECONOMICUS TO HOMO ALTIORE (HOLISTIC). IN THE SEARCH OF A NEW PARADIGM

Abstract

The economic slowdown has brought about dramatic consequences in many countries: non-repayable debts, extreme difficulties for individuals and businesses in obtaining credit, bankruptcies, investor distrust and falls in global stock markets, government bailouts against banks and other financial institutions at risk of failure. In fact, the crisis would probably not have taken place without some political decisions, related to monetary and economic policy, as well as insufficient regulation and monitoring. It can be said that during the crisis, the “invisible hand” of free market turned to “stealing hand” through market games driven by the irrational and irresponsible behaviors of politicians, creditors, and consumers. Current economic theory has been constructed on a foundation laid more than 200 years ago. The traditional economic and finance models are based on the premises of perfect competition, efficient markets, rational behaviors, and market equilibrium. This paradigm suggests that the “invisible hand” will work its magic to resolve all imbalances and bring the economy back to the steady-state equilibrium because market participants behave rationally. This article was inspired by Leibstein’s hypothesis that homo oeconomicus is not a model case but extreme form of behavior that surfaces under extraordinary circumstances. The aim of this paper is an attempt to shift from the concept of homo economicus to the concept of homo altiore (holistic), trying to capture the whole complex nature of human beings.