Economic theory Quote by Kate Raworth
““Depicting rational economic man as an isolated individual – unaffected by the choices of others – proved highly convenient for modelling the economy, but it was long questioned even from within the discipline. At the end of the nineteenth century, the sociologist and economist Thorstein Veblen berated economic theory for depicting man as a ‘self-contained globule of desire’, while the French polymath Henri Poincaré pointed out that it overlooked ‘people’s tendency to act like sheep’.31 He was right: we are not so different from herds as we might like to imagine. We follow social norms, typically preferring to do what we expect others will do and, especially if filled with fear or doubt, we tend to go with the crowd. One””
About This Quote
Source Book: The Economics of Human Ecology, 2022
Economic models often treat individuals as isolated decision‑makers, ignoring social influence and herd behavior.
In simple terms: Models ignore how people copy others.
Key Takeaway
Consider social context in economic analysis.
Themes
economics
social behavior
modeling
herd mentality
Mood
analytical
critical
thoughtful
Type
theoretical
analytical
critical
When to use this quote
- policy design
- marketing strategies
- financial forecasting
- public health campaigns
Key Concepts
rational choice theory
social conformity
norms
Questions to Reflect On
- How do social norms shape economic decisions?
- When might following the crowd be beneficial?
A Different Perspective
Ignoring social influence can lead to inaccurate predictions and policy failures.
