The strong belief of Alan Greenspan to the free capitalistic market economy is based on his perception of human being as a rational thinking creature. The core idea of capitalistic market economy and free competition is incorporated in the term homo economicus.
A human being has rational mind and when homo economicus makes rational choices with regard to his own conditions the economy will develop favorably. In theory.
Greenspan thinks that economic crises are due to the irrational behavior homo economicus is inclined to when he feels fear or is blinded by extreme euphoria and suppresses the voice of reason. This dark side of homo economicus is in Greenspan’s view due to the animalistic inheritance (animal spirit) of a rational, economic human being, homo sapiens.
The Latin word sapiens means wise. Wise man, social animal. But are people – homo sapiens or homo economicus – wise?
People have free will. They can be social or anti-social just as they like to. As free market economy expressly lays stress on free will and free competition it becomes evident that homo economicus is not necessarily a divine being, who strives for higher goals, which promote common well-being.
It rather becomes clear that a homo economicus can be totally under the control of his ego, animal spirit.
In Greenspan’s thoughts the choices a rationally acting homo economicus makes, are good as such. But rationality is a comparable term.
Rational in relation to what?
A person can act rationally in relation to his short-term goals, but irrationally in relation to his long-term goals. This contradictory behaviour is well shown in the movie The Two Mr Kissels (2008), which is a true story of brothers, who make millions.
However, due to their short-sighted decisions they are practically digging their own grave, and in the end all their wealth and glamorous life is not able to save them, although they are acting in a way rationally.
When wise man, homo sapiens says that the well-being of other people is a key to my own well-being and happiness, homo economicus says that my wealth is the key to the well-being of other people.
My own actions are more or less irrational. I have had basic income ever since I became handicapped. The state has paid every month a sum of money into my bank account to cover my basic needs. The sum was never very big, but its value has been immense.
Its value was never in the fact that with the money I can buy more or less unnecessary things. The value is included in the fact that I have been able to concentrate on finding myself and focus on doing long-term planning, what brings me forward.
I didn’t have to scatter my energy by searching my daily bread or trying to convince bureaucrats that my needs are important in regard to my existence. I have been able to focus on fostering my spiritual growth and creative powers.
People say that if everyone would have basic income they would surely do nothing to advance common welfare, only enjoy free meal. I believe however that people are basically social animals like me, who have the need to feel a sense of belonging, acceptance, trust and respect among their social group. People’s need for self-actualization is our basic need, and we naturally want to accomplish everything that we can, to become the most that we can be.
To be honest, in the beginning of my disability I had a phase, when I only enjoyed my existence and I was grateful that I didn’t have to do anything to get financial support. That time is one of the best in my life.
I remember an evening in the 1980s, as I was walking the streets of Helsinki, leaning on my walking stick. I was on my way home from an evening school, where I brushed up some high school courses. It was late autumn and the sky was dark. I came to a wide crossroads, and was sniffing the velvet smooth night air. The street lights looked like jewels in the darkness.
Feeling a deep sense of gratitude I asked myself, how on earth could the life be so nice to me.
Suddenly the reality brought me down to the earth again as I stumbled over my shoestrings.
I was sitting in the middle of the road, feeling amused, watching cars pass by. Someone came running to me, drag me like a rag doll to the edge of the road and helped me stand up.
Everything was fine.