AN ECONOMIC THEORY OF GREED, LOVE, GROUPS, AND NETWORKS

In today's economic climate it is perhaps not completely unfair to ask if experts on economics know what they are talking about. And if they do why do we find ourselves in a global financial crisis that seems to go on forever. Perhaps one answer can be found in mainstream economic theory's lack of a nuanced approach to human behaviour. You could say that this book is an attempt to remedy this problem. The main author, Paul Frijters, is a Professor of Economics at the University of Queensland. He has specialised in happiness, health economics and econometrics and is particularly interested in how socio-economic variables affect people's life experience and the 'unanswerable' economic mysteries in life. In this book he presents a unified theory of human behaviour. He incorporates definitions of love, friendship, loyalty, power, coalitions, ideals, joy and compassion and the dynamics of groups and networks, into the traditional mainstream economic view to answer fundamental questions about our socioeconomic system. From a psychologist's point of view, I would argue that only with a nuanced view of concepts such as love, greed and power will human interaction and behaviour be understood sufficiently to contribute to economic theory. To assume that human behaviour is black and white and that we all behave in a unified way is not sufficient. We may all have the same basic emotional reactions, but we express them in widely different ways - some more predictable and comprehensible than others. The book has been welcomed as a remarkable breakthrough by other economists who recognise the limitations of neo-classical economic theory. Again, from a psychologist's viewpoint, the hope is that this is only the beginning. Another barrier to break through, I would argue, is to shift focus away from a conception of the world as a competitive place where only the strongest will survive. Not only is this a misinterpretation of Darwin's theory, but it is also a very one-sided and negative view of the world. A focus on synergy, cooperation and nature's tendency to establish a niche for every species, including humans, may open up a more positive approach to economic theory. And with no real sight of a positive end to the current economic climate, most of us would agree that there is an urgent need to come up with theories that can offer a realistic solution to the world's economic problems, given that much bigger environmental problems may be waiting just around the corner.