GS220 Lecture Notes - Lecture 6: Laissez-Faire, Potlatch, Embeddedness
Document Summary
I will discuss the quesions in more depth ater the break. Homo economicus concept in many economic theories that portrays humans as raional, self-interested agents who usually pursue their individually-deined ends opimally: atempts to maximize uility as a consumer and proit as a producer. Associated with 18 th century thinker adam smith, wealth of naions. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. Basis of economic life is a certain propensity in human nature to truck, barter, and exchange one thing for another. Raional choice theory: a person who acted raionally on complete knowledge out of self-interest and the desire for wealth: 20th century. Money vital to working of market economy facilitates exchange. Nonmonetary economy: based on barter; people exchanging goods and services for other goods and services directly.
