Classical Economic Man: was he Interested in Keeping Up with the Joneses?

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<jats:p>One of the significant contributions of the <jats:italic>The Wealth of Nations</jats:italic> was to bring to the consciousness of economists the centrality of the pursuit of self-interest in economic affairs. Following the publication of the <jats:italic>The Wealth of Nations</jats:italic>, economists increasingly assumed that the pursuit of self-interest was the prime psychological drive of mankind. As economics developed, modifications of the self-interest postulate occurred. Economists began to formally model the pursuit of self-interest and a specific form of the pursuit of self-interest ultimately came to dominate economists' thinking. Specifically, economists have taken a methodologically individualistic approach to this question. With rare exception, economists presume that the individual pursues self-interest more or less in “isolation.” As Frank Knight pointed out, the purely rational action of the economic man requires the complete absence of personal relations, in effect requiring persons to treat each other as vending machines (Knight 1960, p. 73). Robinson Crusoe alone on his island is thus the epitome of the economic man assumed by neoclassical economic theory.</jats:p>

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