"Homo Economicus", Political Economy and Socialism

Neither the critique of capitalism nor the search for socialist economic alternatives can avoid an explicit engagement with values. This entails rejecting homo economicus, which acts as a basic building block for both neoclassical economic theory and the defense of the market economic order. Socialists have much to learn from three recent literatures: on the ethical limitations of the market, endogenous preferences and the social determinants of superior economic performance — all based on an explicit rejection of the homo economicus assumption. None of these literatures is unproblematic from a socialist perspective, but there is much that is useful and much more that can become useful with an appropriate critical engagement. Institutions and processes that promote socialist values such as cooperation and solidarity are a crucial part of both the transition to and the maturing of a more participatory and coordinated economic system.