1.3.1 Human nature

Helpful prior learning and learning objectives

Helpful prior learning:

Learning objectives:

An economy is all the human-made systems that we use to transfer and transform energy and matter to  meet our needs and wants. People interact with each other in these human-made systems. So to understand the economy, we must understand how human beings generally behave, called human nature.

A thought experiment

Imagine two aeroplanes make an emergency landing, on Planet A and Planet B, and are damaged. As smoke fills the cabin, everyone knows they must escape.

Which planet do you think we live on? Think before revealing the text below.

You might have chosen Planet B. Many people believe that humans are naturally selfish and competitive. This view dominates media coverage of local and global events, often focusing on negative news instead of positive stories. Mainstream economics also promotes the idea that humans act mainly for self-interest.

What do most economists assume about human nature? 

Selfish, competitive, unlimited wants

Assumptions are what we believe to be true, without necessarily having supporting evidence.  Most mainstream economic theories assume that:

Economist Kate Raworth illustrates these assumed human characteristics in Figure 1. The figure is described as standing alone, money in hand, calculator in head, ego in heart and nature at their feet.

Economic man - dollar sign in hand, percentage by head, nature at feet

Figure 1. Economic man, some damaging assumptions (Credit: Kate Raworth, Jonny Lawrence CC BY-SA 4.0)

What are humans really like? 

Complicated, empathetic, cooperative, with limited needs

Humans can be selfish and competitive. We also seek status and having power can make us feel more secure. But that is not the whole story of human nature.

Research shows that we are very often empathetic and cooperative. You might have experienced this during the Covid-19 pandemic. While there was some panic shopping and vaccine hoarding, most people supported each other in their communities. Though there are some contexts where individual selfish behaviour ‘wins out’ over cooperative behaviour within single groups, research shows that cooperative groups are more successful than selfish groups. Our complex societies very much depend on empathetic and cooperative behaviour.

We should also question the assumption of unlimited human needs and wants. Our basic human biological needs like nutrition and hydration are limited. No one needs unlimited food. Humans also have social needs to truly thrive in their communities. These too are limited.

However, social and economic conditions can lead us to desire more than we need. Social status matters to humans and if our societies equate social status with material wealth, then we might choose to buy more things to increase our status. Economic inequality can worsen this situation. If some people clearly have more material wealth than others, then we may feel a competition to purchase more things to keep up. This is called aspirational consumption, and is a key driver of overconsumption globally.

Figure 2. Human needs are limited. However, status-seeking can lead us to want more. 

(Credit: mgstanton Thomas Halfmann CC BY-NC-ND 2.0)

Advertising takes advantage of social comparison, often equating material goods with happiness. Free digital services, like social media, gather your personal information to show you ads that match your interests. This makes you more likely to buy things, perhaps more than necessary. This consumption of unnecessary goods uses too much energy and material resources and creates more waste that harms ecosystems.

But social conditions can reduce our wants too. In societies with less economic inequality, there is less social comparison and less aspirational consumption. We can influence social and economic conditions, particularly with regard to inequality, to lessen our impact on ecosystems.

Why do our perceptions of human nature matter?

The assumption that human beings are selfish, competitive, with unlimited wants is a problem for various reasons.

Assumptions shape us

Assumptions about human nature shape who we become. If told you are selfish and competitive with endless needs and wants, you may actually develop those characteristics. Research has found that economics students who are taught these self-interested assumptions become more selfish and less cooperative with others. If we want more empathetic and cooperative human behaviour, then our economics courses should highlight those traits.

We often overlook the role of care in the economy

If we believe that humans are selfish and competitive, it can lead us to overlook the role of care in our economy. While some care work is paid, most care work is unpaid and done with empathy, selflessness. But this work may be ignored or exploited in a world where we believe most people are selfish. Care work is essential for human wellbeing, something we all should be engaged in, and it must be actively supported by communities, businesses, and governments. Understanding the human drive for social connection and cooperation is essential.

We overlook powerful tools for change

When business people and politicians have studied economics, their assumptions about selfish and competitive human behaviour influence business decisions and policies. This can lead businesses to prioritise their profits over human wellbeing and the environment. Politicians may underestimate how values, reciprocity and social networks can help address social and economic problems. They may underestimate the role of economic inequality in negative human behaviours. Recognising the empathetic and cooperative aspects of human nature is important for better decision-making.

Economist Kate Raworth explains why we need to update our assumptions about human nature in the short video below.

Activity 1.1.2

Concept: Systems

Skills: Communication and social skills

Time: 30 minutes

Type: Best as small group activity, but can also be done as individual

Economist Kate Raworth uses the picture in Figure 1 to capture the assumptions about human nature used in many economic models. To describe the picture she says that this person is "standing alone, money in hand, calculator in head, ego in heart and nature at their feet."

But this portrait does not really capture what human beings are like. Based on what you have read in this section, draw a new diagram to represent human nature. 

If you are in a group, share ideas and agree on the best one to sketch. Share these with a larger group if you are able.

Ideas for longer activities, deeper engagement, and projects are listed in Subtopic 1.5 Taking action

Economic man - dollar sign in hand, percentage by head, nature at feet

Figure 1. Economic man, some damaging assumptions (Credit: Kate Raworth, Jonny Lawrence CC BY-SA 4.0)

Checking for understanding

Further exploration


Bregman, Rutger (2020). Humankind. London: Bloomsbury Publishing.

Frank, R. H., Gilovich, T., & Regan, D. T. (1993). Does Studying Economics Inhibit Cooperation? The Journal of Economic Perspectives, 7(2), 159–171. http://www.jstor.org/stable/2138205.

Institute for New Economic Thinking. (2019). Unlimited Wants, Limited Resources | How & How NOT to Do Economics with Robert Skidelsky [Video]. YouTube. https://youtu.be/CifipPzK7ao.

Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st century economist. London: Penguin Random House. (Chapter 3: Nurture Human Nature)

Wilson, D. S., & Sober, E. (2024, April 3). Natural selection and multilevel selection as causal theories. ProSocial World. https://www.prosocial.world/posts/natural-selection-and-multilevel-selection-as-causal-theories.


Link to Quizlet interactive flashcards and terminology games for Section 1.3.1 Human nature

economy: all the human-made systems that transfer and transform energy and matter to meet human needs and wants

system: a set of interdependent parts that organise to create a functional whole

transfer: to move something from one place to another

transform: a change in the state, energy or chemical nature of something

energy: the ability to do work or cause change

matter: anything that takes up space and has mass

human nature: how human beings generally behave

economics: the study and practice of how we organise ourselves to meet human needs and wants in the planetary ‘household.

assumption: what we believe to be true, without necessarily having supporting evidence

utility: personal satisfaction or benefit

power: the ability to influence events or the behaviour of other people

empathetic: the ability to understand other people’s feelings

hoarding: aquiring and holding excessive amounts of goods or money, beyond an amount that is useful or needed

wealth: the total value (stock) of someone’s assets such as money, house, or investments

economic inequality: unequal distribution of income and opportunity between different groups in society

aspirational consumption: buying goods in order to increase self-esteem and social status

overconsumption: buying and using more products and resources than you need

waste: unwanted or unusable materials

ecosystem: the interaction of a community of organisms with their physical environment

care: the act of providing what is necessary for the health, welfare, upkeep, and protection of someone or something

exploit: using and benefiting from resources; the term is often used negatively to imply using power to take advantage of a situation

profit: the difference between the amount of money earned from selling something and the cost to produce it

values: ideas about what is important or good

reciprocity: exchanging things and favours with others for mutual benefit