Rosenberg: Can Economic Theory Explain Everything?

A Rosenberg, “Can Economic Theory Explain Everything?,” Philosophy of the Social Sciences 9, no. 4 (1979): 509-27.

The article begins by wondering why homo economicus has made a comeback. It argues that this concept was previously not taken as being very seriously descriptive, and that it was merely an analytical tool for getting the theory of neo-classical behavior off of the ground. People didn't actually believe that agents were utility maximizing calculators; nor did they understand the actions of firms to take on characteristics that were driven entirely by strictly defined maximizing behavior. Homo economicus was a helpful way to make lower level assumptions that were able to aggregate up to more macro level economic behavior.

Rosenberg highlights Becker's contribution to the increasing importance of homo economicus. Becker's approach assumes maximizing behavior, relatively efficient markets and static preferences across culture and class. This argument is elegant and constructed to be widely explanatory. Rosenberg goes through the assumptions of the theory with an eye towards picking apart its logic.

The article is an excellent dissection of Becker's work, and whether or not it represents a truly economic explanation of all human behavior through models of rationality, choice and preferences. The author is skeptical that it meets any of the above goals, though he also contends that it is a remarkably accomplished piece that might make the case for homo economicus and the pervasive explanatory power of economics more thoroughly than others.