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Economics

Last updated February 15, 2022

Our goal as economic designers is to craft the systems that drive our selected set of values.

Source: Prosocial economics for game design by Daniel Cook

Economics is predominantly concerned with the central Economic Problem, namely

However, assumptions in the early economic models of human behaviour are problematic:

  1. Homo economicus: The most common behavioral model assumes that humans are atomic individuals who operate rationally and selfishly.  We know now that humans have limited attention, are contextually altruistic, are highly tribe flourishing, and exhibit a wide range of irrational cognitive biases.
  2. Individuals are the best judge of their needs: Our brains are not conscious of the base psychological processes driving some of our most pressing needs and are thus unable to value relationships rationally.
  3. Weak social modeling: Most economics models ignore basic human behavior such as friendship networks, affiliation networks, limits on cognitive resources (ex: attention) or altruism.

Economics embraces reductive utilitarianism and posits you can put a price on anything. We tend to be intrinsically motivated to connect to others and invest long term in a relationship where no extrinsic value is ever publicly admitted. When a relationship transitions into being an extrinsically rewarded transactional relationship, the relationship often suffers a catastrophic loss of value. (This is the same reason that just throwing money at open source software often doesn’t work, it kills the intrinsic drive to create)

Selfishness

Source: Does Studying Economics Breed Greed? by Adam Grant

Those that practice economics — and to a degree modern American capitalism — are heavily invested in an implicit system of self-centered moral values.

“The repetitive doctrine that humans are best modeled as selfish rational optimizers creates a set of selfish social norms that practitioners consciously or subconsciously follow. The act of studying economics makes you a morally worse human-being (by most definitions of morality.)”

How do we move beyond the study of scarcity and towards a study of abundance and positive sum goods?


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