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234 • Macroeconomicsothers experience. Social interactions matter only to the extent thatthey affect one’s own consumption, leisure, and wealth.Broader economic behavior is simply the aggregation of decisions byrational, self-interested individuals. Though most economists recognizethat the assumptions of Homo economicus are somewhat of a caricature ofreal human behavior, these assumptions nonetheless form one of the centralpillars of conventional microeconomic theory. Competitive free marketsin theory take advantage of our self-interest to create a systemthrough which competitive, selfish behavior generates the greatest goodfor the greatest number. Since the market works its magic through theprice mechanism, market prices reflect our values and desires.THINK ABOUT IT!As we explore the behavioral basis for economics, you might find ituseful to think about how you would answer these questions: (1) DoesH. economicus really describe us?; (2) If not, then what does?; and (3)What do you think this means for the study of economics?Box 13-1Ecological Economics and theSelf-Interest AssumptionEcological economics has inherited from both of its parents the idea thatindividual selfishness and competitive struggle lead to the greater collectivegood. From economics, beginning with Adam Smith, comes the“invisible hand.” From biology, via ecology, comes Darwin’s natural selectionof the best-adapted individuals in the face of competition for thelimited means of subsistence forced by Malthusian population pressure.In part, these are two assumptions about how the world works ratherthan the affirmation of self-interest as a moral value. Competition istaken as a fact. But in both cases the assumption is blessed by its purportedconsequences: market efficiency and evolutionary progress.There are other traditions in both economics and biology that contradictthe assumption of selfishness. Adam Smith himself, in The Theory ofMoral Sentiments, emphasized cooperation and community as the overallcontext in which competition could be trusted. Darwin recognizedthat group selection favored the evolution of moral values and cooperation,a and Kropotkin b emphasized mutual aid as a factor in evolution.Nevertheless, in both disciplines the selfishness tradition has beenquite dominant, and we should be aware in ecological economics thatwe have received a double dose of this inheritance, for better or worse.a C. Darwin, Descent of Man, 1871. Online: http://www.infidels.org/library/historical/charles_darwin/descent_of_man/.b P. Kropotkin, Mutual Aid: A Factor of Evolution, 1902. Online: http://www.calresco.org/texts/mutaid.htm.