Identity, Capabilities, and Changing Economics: Reflexive, Adaptive, Socially Embedded Individuals

Mainstream economics assumes economic agents act and make decisions to maximize their utility, but behavioral economics views individuals through the lens of bounded rationality. Identity, Capabilities, and Changing Economics argues that the utility conception of individuals should be replaced by a conception of economic agents in an uncertain world as socially embedded and identified with their capabilities.

Format: Paperback / softback
Length: 304 pages
Publication date: 01 February 2024
Publisher: Cambridge University Press

Mainstream economics posits that economic agents are driven by the pursuit of maximizing their utility, a model rooted in rational choice theory. However, this assumption has faced mounting criticism within the field of economics due to its failure to accurately capture the nuanced and complex nature of human behavior and decision-making.

In response to this challenge, there has been a significant shift towards a more realistic portrayal of economic agents. This shift has been largely attributed to the rise of behavioral economics, which adopts a bounded rationality perspective to understand individuals' behavior. Behavioral economics recognizes that individuals are bounded by their cognitive limitations, time constraints, and social influences, which shape their decisions and actions.

One notable book that further extends this critique of the utility conception of individuals is "Identity, Capabilities, and Changing Economics." Authored by one of the world's leading philosophers of economics, the book proposes a novel approach to economics theory of the individual. Instead of viewing individuals as utility maximizers, the book advocates for a conception of economic agents as socially embedded and identified with their capabilities.

According to the author, individuals are adaptive and reflexive beings who constantly adapt to their environment and develop new skills and capacities. The book argues that the traditional utility conception of individuals fails to capture the full range of human experiences and motivations, such as identity, social relationships, and self-actualization. By adopting a capabilities perspective, the book seeks to provide a more comprehensive understanding of individual behavior and decision-making.

The book develops a rich and nuanced account of individual agency, exploring how individuals' identities, capabilities, and social relationships shape their economic outcomes. It emphasizes the importance of recognizing and valuing diverse human capabilities, such as creativity, empathy, and social skills, which are often overlooked in traditional economic models. The book also discusses the role of institutions and policies in shaping individuals' opportunities and capabilities, highlighting the need for policies that promote social mobility, equality, and inclusive growth.

Overall, "Identity, Capabilities, and Changing Economics" offers a compelling and thought-provoking perspective on economics theory of the individual. By challenging the traditional utility conception and advocating for a capabilities perspective, the book provides a valuable contribution to our understanding of human behavior and decision-making in the economic realm. It encourages economists and policymakers to consider the broader social and cultural dimensions of economic analysis and to develop policies that promote human well-being and social justice.

Weight: 442g
ISBN-13: 9781009438254