The lie of Homo Economicus

In this TED talk by George Monbiot and Ewan McLennan, Monbiot introduces the lie of Homo Economicus.  The talk is about loneliness but the false assumption of Homo Economicus  is a key issue of what makes Islamic economics / Islamic finance fundamentally different.  I hope to think and write more on this later but for now, here is Monbiot’s introduction to the TED talk.

Our dominant ideology is based on a lie: the idea that human beings are fundamentally selfish. Some economists even have a word for this. They call us homo Economicus, self-maximizing man, elbowing other people out of the way in order to enhance our own wealth and power. And it’s certainly true that some economists behave like that and some public figures behave like that. But it does not describe the majority of human by a long shot.

We are in fact an exceptional species with levels of altruism and empathy that exceed those of any other species. And that capacity for altruism appears to be innate.

From the age of 14 months, children will try to help other reach something that’s out of their grasp.  By the time they’re two, they will start to share valued possessions, not just with family members but with unrelated people — something which really marks us out from the great majority of animal species. By the time they’re three, they will start establishing moral norms, imposing on their friends and other people they know, altruistic codes. “Don’t behave like that!” “That’s wrong!”

All these seem to be innate and embedded characteristics — part of the normal human psyche — but it is quite exceptional in terms of the rest of the animal kingdom.

When it comes to another characteristic too, we are way out ahead of almost any other species, which is our degree of social interaction, the extent to which we possess social minds. Perhaps the only species which goes further than us is the naked molerat but I won’t go into that today.

And these two characteristics brought together will create this remarkable moral sense and an ability to project our moral selves well beyond our immediate circumstances.

A recent paper in a psychology journal points out that Homo Economicus is an excellent description — of chimpanzees. And it’s a really bad description of human beings.

But the danger is that if we keep telling ourselves that we’re selfish and greedy and grasping and we just shove everyone out of the way, that that could become a self-fulfilling claim. That we start to see other people as a social threat, we start to see them as, above all else, competitive in their relations with us, rather than, the thing that human beings do better than any other species, being co-operative.

And I wouldn’t claim that this is the only thing setting us apart. Or the only thing responsible for the extraordinary levels of loneliness that many of the 7 billion people crowded on this planet paradoxically suffer. Plainly there’s been all sorts of economic and technological and social change which have also been responsible for these horrendous levels of involuntary social isolation but it’s bound to be a factor. Surely, if this is the way that we see other people and we sense this social threat from other people, that is bound to set us apart.

How do you buy a home without interest?

This is the first in a series of videos I’m planning to make about the diminishing partnership (musharakah mutanaqisah) model for interest-free home buying.

The 3 minute video illustrates the basic concept of how it works.

In the video, orange rectangles represent rent, blue represents the home buyer’s share of the house and green represents the investor / partner’s share.