Is Homo Economicus a Psychopath?

This is like claiming that physicists are "wrong" because they spend time thinking about a frictionless vacuum[0].

> (Actually, classical economics does, in the sense that markets follow a price-demand curve rather than a wiggle as seen experimentally.)

That's the difference between the limitations of an idealized model and the limitations of experimental process. That doesn't mean that either one is "wrong", any more than it would in the physical sciences.

> Obviously you don’t do that when you go shopping.

Correct - classical economics describes the behavior of rational actors with perfect and symmetric information. In this case, there are significant, non-zero costs to obtaining perfect information. That doesn't mean that the principles behind classical economics are false, were those assumptions to hold. And it doesn't mean that the model is useless even absent those assumptions.

Just as physicists can reason about frictionless vacuums and use that to inform their understandings of the real world (with friction and air), economists can reason about perfectly rational actors with perfect and symmetric information, and use that to inform their understandings of the real world (with possibly irrational actors and asymmetric and/or imperfect information).

[0] https://xkcd.com/669/

I work in an investment bank. Here I see a lot of people with psychopathic tendencies, probably more than in other industries I have worked in, but, what worries we most, is the ones I don't spot. They are there, after all, finance offers them a refuge where their singular behaviour is rewarded.

You've touched on the strawman about HE, but you've misidentified the source. It is the Marxists that want you to believe the psychopath claim, in their desire to stereotype capitalism as blind greed. Good capitalists that understand economics will perfectly happily include happiness and such in the value functions they use, because it turns out economic theory stops functioning without that assumption; it's built in at the ground floor. By this, I mean, the math stops working, at the deepest and most profound level economics is built on the idea that entities have different value judgments, down at the microeconomics level where economics is actually meaningful.

And note the Marxists then wish to slide in the idea that they ought to get to set your value function, when you aren't looking. (Which is part of the silliness at the core of the whole idea when they think they can set the same valuations for everyone, because, again, the math stops making sense and, what a surprise, indeed systems that truly attempt to function in a fully Marxist manner really do break down in a horrifyingly complete manner, as if they were trying to build an economy on the proposition that 1+1=3.)

The strawman idea comes from the Marxists, who generally don't want you engaging with capitalist theory particularly fairly, since they would lose a big rhetorical weapon if you do.

You can not understand the anger about HE until you understand that Marxists desperately need humans to not behave "slightly irrationally under some circumstances" (the real scenario) but need humans to be profoundly irrational, so they can justify their handing over all sorts of power to the government so they can save everyone from themselves. Of course explaining exactly how the government will transcend being made out of irrational humans is conveniently left unexplained, since that is impossible. But, if humans were really profoundly irrational, we wouldn't be having this argument, because our species would be long dead. People who want to believe that people are profoundly irrational on a massive scale must grapple with the problem that such behaviors lead to death in the real universe, and tend to be evolved out pretty quickly. (This is where the "amusing" comes from in my other post; humans are not entirely rational, but we've been tuned to be surprisingly rational in many ways... our claimed reasons however have not been so tuned.)

So the problem with HE isn't that he's utterly, utterly nonexistent... the problem with HE is that it's a slightly imperfect model, and iterative systems like the economy being what they are, that imperfection can end up magnified in surprising nonlinear ways and have bizarre consequences, in a system that often has nonlinear and bizarre behaviors even if everyone was totally rational. So it important that science is done to determine the ways in which real humans deviate from HE... but these will generally be in relatively small ways, rather than the massive total failures of the model that the Marxists are searching for.

This reminds of a thought I had a few months ago: how have there not been more thought pieces relating Uber-the-business's recent/relentless PR-debacles to Nietzsche's Ubermensch concept? I guess I'll give it a go.

Uber/Travis and his execs seem to demonstrate the belief that they are "overmen" in that they seem to believe that they transcend the rules of society and are destined to shape society and its values rather than the other way around (probably something not too uncommonly shared with HN readers…).

A few fun/funny/serious examples (in no particular order):

1. They outrightly express resistance to laws-as-is, and regularly threaten to ignore and sometimes do break those regs as necessary to conduct their business / benefit themselves and their consumers.

2. They hire lobbyists and other high-level political actors to change the laws they don't like and/or influence lawmakers - not atypical for a large company, but they did this earlier than most companies at their stage, with much more specific agendas in place and with a lot more PR surrounding it (the last may or may not have been their doing, hard to say). They have a belief (probably well-founded) that they can use the political process to make the law bend to their will. “Creating New Values” as any good uberman should.

3. They call their central system “Godmode” which implies that they, the viewers, are like God (a bit of a stretch I know…couldn’t resist)

4. They are proud that using the data in Godmode they can track, predict and identify specifics of other human being’s behavior.

5. The whole “we’ll pay our own researchers to smear journalists” thing - another good example of Creating New Values and constructing narratives.

6. The general feeling that Uber (perhaps correctly) operates against “states” and “sovereigns” and “systems” more than corporate competitors (who even writes about Lyft anymore these days…)

The funny thing is that after thinking this through, all (good?) CEOs of major corporations basically operate like this (and so do many other tech-leaders - it is often associated with libertarian-leaning individuals like P. Thiel, etc.) - the difference is that Uber (1) has a name that calls it out and (2) seems to be especially prone to doing this in public and (3) sometimes appears to relishes their “overlord-iness” a little too much. You can call it being crass or being honest.

In any case, they seem to be getting hip to the system and playing nice which of course can be viewed as just another level of the game, etc. - still, glad to see them do it because I overall think that playing nice is best (especially when you can afford to do it) and with a $40b val. and a couple billion raised, I think they can spare some good behavior, at least for now =)

Note on Uber: I think Uber is a great business and has a significantly net-positive impact on society, and I reserve judgment w/r/t whether TK and the other Uber execs are good or bad people - I can't conclude they are good because they run a good business, and I can't conclude they are bad because they say stupid things in public.

Note on Nietzche: In Thus Spake Zarathrusa, the "uberman" concept is (maybe) considered a positive that humanity should work towards in the absence of belief in God, and I think it can still be understood as such. The fact that history has attributed some very negative actions to the belief in this concept (Hitler, Leopold & Loeb's murder, etc.) is, in my opinion, not definitive but at the same time not entirely insignificant, but I'm also a Christian that believes in capital-M Morality so I'm biased against nihilism in general.