Table of Contents

Intangible Capital

Intangible Capital

Its Contribution to Economic Growth, Well-being and Rationality

John F. Tomer

Despite increasing research efforts, there is still much confusion regarding the nature and contribution of the most intangible forms of capital. This book develops a comprehensive and unifying conception of intangible capital in order to understand its role with respect to economic growth, well-being, and rationality. As the book illustrates, utilizing the intangible capital concept enables many new and important economic insights. Intangible capital is defined to include standard human capital, noncognitive human capital (including personal capital), social capital, and other intangible manifestations of human capacity. Understanding intangible capital is a key to realizing the full human potential of our economic systems.

Chapter 11: Beyond the Rationality of Economic Man, Toward the True Rationality of Human Man

John F. Tomer

Subjects: economics and finance, behavioural and experimental economics


INRODUCTION The concept of rationality used by economists is a central, defining feature of economics today. It is important as both a positive and normative concept. Unfortunately, it is a problematic feature in both senses. A very large number of articles and books have been written about the deficiencies of rationality as a positive or descriptive concept, but relatively few have dealt with the deficiencies of economic rationality as a normative concept. This chapter proposes: (a) to review and synthesize the most cogent and telling of the arguments in the latter literature; and (b) based on these to develop a more appropriate normative conception of rationality. It is anticipated that this alternative conception of rationality, true rationality, will be especially appropriate for a humanistic economics. Hopefully, it will be a concept that can better serve as a guide to resource allocation in order that the socio-economy can attain its true potential of human wellbeing. This alternative conception should also make more sense from a philosophical, spiritual and religious perspective than the economists’ conception. THE ESSENCE OF RATIONALITY To begin, let’s define rationality in a very general way, a way that all economists, mainstream and heterodox, might be able to agree upon. Accordingly, rationality involves the appropriate use of reason to make the best possible choices considering what is under the circumstances really in the best interests of the choosing agent (see Rescher, 1988: Chapter 1 for similar definitions). Wide agreement on this definition is...

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