Humanistic economics is a distinct pattern of economic thought with old historical roots that have been more recently invigorated by E. F. Schumacher's Small Is Beautiful: Economics as if People Mattered (1973). Proponents argue for "persons-first" economic theories as opposed to mainstream economic theories which are understood as often emphasizing financial gain over human well-being. In particular, the overly abstract human image implicit in mainstream economics is critically analyzed and instead it attempts a rethinking of economic principles, policies and institutions based on a richer and more balanced view of human nature. According to Schumacher:
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Call a thing immoral or ugly, soul-destroying or a degradation of man, a peril to the peace of the world or to the well-being of future generations; as long as you have not shown it to be uneconomic you have not really questioned its right to exist, grow, and prosper.
Call a thing immoral or ugly, soul-destroying or a degradation of man, a peril to the peace of the world or to the well-being of future generations; as long as you have not shown it to be uneconomic you have not really questioned its right to exist, grow, and prosper.
Overview
Humanistic economics can be described as a perspective that imbues elements of humanistic psychology, moral philosophy, political science, sociology and common sense into traditional economic thought. Or, to define it more formally, contemporary humanistic economics seeks to:
- describe, analyze and critically assess prevailing socio-economic institutions and policies
- provide normative (value) guidelines on how to improve them in terms of human (not merely "economic") well-being
In the process, basic human needs, human rights, human dignity, community, cooperation, economic democracy and economic sustainability provide the framework. At its foundation, humanistic economics seeks to replace atomistic economic man with a more holistic human image. One approach is broadly based on Abraham Maslow’s humanistic psychology.
Characteristic elements
According to Mark A. Lutz, five characteristic elements of humanistic economics can be summarized as follows: