Fronteza

The Psychological Economics

Events of the last century have revealed the unsoundness and immaturity of economic ideas such as the ability to develop the healthy social ecosystem based on theoretical concepts of the free and efficient market driven by logical rules and freedoms. The authors of those ideas neglected and ignored the key concept of the social ecosystem: there is a person in the heart. Every person has its psychological portrait, which predetermines his or her capabilities to create or to destruct. The person’s psychological portrait is primarily predetermined by the social environment and way of thinking prevailing in the society. To put in other words, the ideas of free market and open competition as the driving forces of development of the healthy social ecosystem is unsound, because they ignore and do not place the person’s psychological portrait in the heart of the social ecosystem, destroying its true meaning thus. Consequently, economic theories based on those ideas are lifeless because they neglect the person’s psychological portrait. They naively assume that the healthy social ecosystem can be developed only in the presence of free market and open competition driven by some logical and rational rules. Such an assumption ignores the origins of human beings. The assumption of abilities of the social ecosystem to successfully develop in the presence of free market only, it is akin to assume that human beings are completely rational and driven only by logical rules. The healthy social ecosystem can be developed only when it follows the sound balance rules and constraints. This is a law of any ecosystem and it is not the subject to violate, as we got used to do. Its violation threatens the very existence of the ecosystem. The roots lie in the very nature of human beings. The very nature of human beings predetermines the presence of both constructive and destructive origins and the presence of both logical (rational) and emotional (irrational) thinking. The balance rules and constraints in the social ecosystem purpose to suppress the destructive origins and stimulate the constructive origins. For example, different dogmas and taboos in the religion society, different codes of conduct and rules of decency in the high society and business society serve that purpose. Any man-made society must follow the balance rules and constraints. Total freedoms are destructive by the very nature, because people with underdeveloped mind, low intelligence and weak will are more inclined to use provided freedoms to reveal their destructive origins. They use their underdeveloped mind to generate destructive and antisocial ideas in order to dominate and suppress more strong-willed and intelligent people in the society. The strong-willed people with developed mind are inclined to generate constructive ideas and to use them to develop the healthy social ecosystem. The competition takes place and has natural origins. It is supposed to drive the development of healthy social ecosystem by promoting more strong-willed and healthy entities. But in the human beings, due to the intrinsic intelligence, both constructive and destructive, and intrinsic capabilities to think, the competition takes one of the two forms: either destructive (unfair) or constructive form. The destructive competition is developed in the form of physical or psychological destruction of more strong-willed and intelligent opponents. It assumes the dominance by destruction. The constructive competition is developed in the form of self-improvement. It assumes the dominance by improvement of personal abilities and qualities – physical, spiritual and mental. Unfortunately, in the presence of unconstrained competition, which is not subdued to the balance rules, and in the presence of total freedoms, the persons with prevailing destruction origins begin to dominate the society. The root cause is that the development of constructive origins requires a lot of time and efforts, whereas the development of destructive origins requires much less efforts. Just compare: how much time and efforts do you need to put on weight and how much time and efforts do you need to lose weight, let alone different pills and drugs? This is the matter of both your intelligence and will. So, if the social ecosystem does not have the sound balance rules, the destructive origins of human beings will definitely find their way out in the form of violence, inhumanity and recklessness. The development of technologies facilitates that. In the financial and business world the destructive origins of competition are developed in the form of Ponzi schemes, accounting frauds, briberies, blackmails, etc. Does the logic of free and efficient market assume such cases? If it does, then we need to rethink the meaning of “efficient” and “rational”. Such cases force the society to toughen the rules and create a bunch of watchdogs – the more freedoms you grant the more security services you need to feel safe. So, the contradiction appears: in order to secure the very existence of free market and open competition, we have to enforce more rules and constraints. We have to breed more watchdogs. The contradiction brings us up to the conclusion that the idea of logically-driven free market and open competition is unsound, until it places the person’s psychological portrait in the heart and admits the requirement to establish the sound balance rules and constraints that will stimulate the constructive origins and suppress the destructive origins of human beings. Only in this case the healthy and creative social ecosystem can be created. The ignorance of the very nature of human beings is inexcusable error for intelligent and strong-willed leading persons. Such conclusions make us come up with the principles of psychological economics that places the person’s psychological portrait and its natural origins in the heart of the social ecosystem and enforces the sound balance rules and constraints in the form of economic, financial, social, ethical, legal and others laws. Only such an approach can secure the development of healthy and creative social ecosystem and can help to suppress the destructive origins of human beings. Total freedoms threaten the very existence of healthy social ecosystem and the humanity as a whole.