Ethics into Economics: Are We Homo Economicus or Homo Religious?

Abstract

This paper argues that the premise of modern economic policies, based purely on neo-classical models, has led to a social disequilibrium and environmental degradation. Neo-classical economic thinkers assume that complex human behaviors can be understood economically and analyzed rationally. Yet, people in the real world behave irrationally and not necessarily economically motivated. The ultimate human utility then lies not only within the economic domain to maximize self-interest in the material world but rather to achieve a satisfying and meaningful livelihood within the spiritual realm. Thus, we are essentially spiritual beings or homo religious having a homo economicus or material experience in search of purpose. The ultimate self-interest does indeed go beyond mere economic means and ends. The premise of economics and ethical and moral considerations should, therefore, be integrated to better understand the so-called economic behavior for a broader welfare of the society for sustainable development.