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Implications of Homo economicus in hierarchical organizations

According to Homo economicus, people are ultimately selfish.

Does that mean that wars exist because humans have conflicting self interests? Furthermore, if wars are bad for the general population because it kills them and destroys property, is it in the self interest of the leaders because they profit from it? Thus, leaders exploit the population so that their utility increases? (i.e. money)

In addition, leaders refer to patriotism, nationalism and religion when they declare wars. Do these concepts give an illusion to the general population that their utility will increase (i.e. safety and better afterlife) in a vague intangible way?

Last, do leaders never look out for interest of the general population, and do they always look for themselves first? Therefore, do those in power always exploit those not in power when they feel like it, i.e. their interests are not aligned?

Answer 784

Lots of questions here, will try to answer each one by one.

Does that mean that wars exist because humans have conflicting self interests?

If you assume that people are ultimately selfish, then yes, every action is caused by selfishness. Since war is a means to end (or perhaps war is a means to establish supremacy during) a conflict, then yes, war is caused by conflicting self interest. I believe that psychologists over the answer to this question, and I am not qualified enough to answer it.

Furthermore, if wars are bad for the general population because it kills them and destroys property, is it in the self interest of the leaders because they profit from it?

Two propositions here: a) War is bad for general populace. b) War is profitable for leaders.

I would argue that both are neither true nor false.

War’s affect on general populace (both negative and positive):

As far as leaders go, the popularity of leaders will change with the outcome/status of war. Winning a war will increase popularity (and possibly wealth in case of ogliarchies/monarchies etc.) , while losing one will lead to loss of popularity (and possible death, exile, loss of property etc.). So, war for leaders is like a high-risk high-profit activity.

Also, note that while modern (political) leaders do not usually fight alongwith troops, in more ancient times, this was not always the case and leaders were expected to fight alongwith troops.

Thus, leaders exploit the population so that their utility increases? (i.e. money)

Since a leader is not always facing an increase in utility, this is not true. But, it might be argued that a leader will not start/fight a war without having a belief in victory (of one sort or other), so a leader is trying to increase expected utility. Since the war may also lead to benefits for the population, it cannot perhaps be said to be exploitation.

In addition, leaders refer to patriotism, nationalism and religion when they declare wars. Do these concepts give an illusion to the general population that their utility will increase (i.e. safety and better afterlife) in a vague intangible way?

These concepts affect the psyche of the population, and thus cannot said to be totally intangible. After all, happiness in life counts for something, and if a person finds utility in religion, then a religious war may indeed increase his utility.

Last, do leaders never look out for interest of the general population, and do they always look for themselves first? Therefore, do those in power always exploit those not in power when they feel like it, i.e. their interests are not aligned?

If you believe the assumption of the book, that all humans are ultimately selfish, then yes. Otherwise, one can only say that it depends upon the psychology of the leader. A leader may himself believe in concepts like patriotism, honour, religion etc. and start/fight a war for those reasons.


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