Eco-capitalism

From Wikipedia, the free encyclopedia

Eco-capitalism, also known as environmental capitalism or green capitalism, is the view that capital exists in nature as "natural capital" (ecosystems that have ecological yield) on which all wealth depends, and therefore, market-based government policy instruments (such as a carbon tax) should be used to resolve environmental problems.

 

The term "Blue Greens" is often applied to those who espouse eco-capitalism. It is considered as the right-wing equivalent to Red Greens.

History

The roots of eco-capitalism can be traced back to the late 1960s. The "Tragedy of the Commons", an essay published in 1968 in Science by Garrett Hardin, claimed the inevitability of malthusian catastrophe due to liberal or democratic government's policies to leave family size matters to the family, and enabling the welfare state to willingly care for potential human overpopulation. Hardin argued that if families were given freedom of choice in the matter, but were removed from a welfare state, parents choosing to overbear would not have the resources to provide for their "litter", thus solving the problem of overpopulation. This represents an early argument made from an eco-capitalist standpoint: overpopulation would technically be solved by a free market. John Baden, a collaborator with Garrett Hardin on other works including Managing the Commons, founded the Political Economy Research Center (now called the Property and Environment Research Center ) in 1982. As one of the first eco-capitalist organizations created, PERC's ongoing mission is "improving environmental quality through property rights and markets". The most popular eco-capitalist idea was emissions trading, or more commonly, cap and trade. Emissions trading, a market-based approach that allows polluting entities to purchase or be allocated permits, began being researched in the late 1960s. International emissions trading was significantly popularized in the 1990s when the United Nations adopted the Kyoto Protocol in 1997.

Eco-capitalist theorists

• Terry L. Anderson is a graduate of the University of Montana, and received his Ph.D from Washington University. Anderson is currently serving as the co-chair of the Hoover Institution's Property Rights, Freedom and Prosperity task force. Anderson advocates that free markets can be both economically beneficial and environmentally protective. Anderson specializes in how markets impact Native American communities and their economies.
• Bruce Yandle, a graduate of Mercer University, attended Georgia State University where he earned a MBA and PhD. Yandle is currently serving as dean emeritus of Clemson University's college of business. Yandle is prominent in the field of eco-capitalism for his story of the "Bootlegger and the Baptist". Yandle's theory of the Bootlegger and the Baptist posits that ethical groups, religious institutions and business captains can align their organizations in the interest of regulation and economic growth.
• Paul Hawken decided at a young age to dedicate his life to making business eco-friendlier. Hawken's is the architect of the United States first natural foods company, Erewhon Trading Company where all products were organically composed. Hawken's continued to make an impact on the business world by founding the research organization, Natural Capital Institute, and developed, Wiser Earth, a program focused on providing a platform for all to communicate about the environment. Not only has Paul Hawken set a good example for how to transform economy into eco-capitalism, but also has authored hundreds of publications, including four best selling books. In his writings, Hawken stresses that many smart ecological options are out there for businesses that will help save the environment, while also continuing to bring economic profit. One idea discussed in his book, Natural Capitalism: Creating the Next Industrial Revolution, is the possibility of developing lightweight, electricity-powered cars as an alternative to our current transportation issue. Hawken attributes the hesitancy of adopting these options to lack of knowledge of these alternatives and high initial costs. Paul Hawken is now the head of OneSun, Inc., an energy corporation concentrated on low-cost solar.
• Lester Brown began his career as a tomato farmer in New Jersey, until earning his degree at Rutgers University and traveling to a rural India for a six-month study of the country's food and population crisis. From this point on, Brown's focus was mostly on finding alternatives that would solve the world’s population and resources problem. With financial support from Rockefeller Brothers Fund, Brown created the Worldwatch Institute, the first dedicated to researching global environmental problems. In 2001, Brown found the Earth Policy Institute, an organization that outlined a vision for creating an environmentally sustainable economy. Over the course of his career, Lester Brown has authored over 50 books and received 25 honorary degrees. In his publications, Brown discusses how the key to an eco-friendly economy is an honest market and replacing harmful aspects of the environment, like fossil fuels with renewable energy. On June 2015, Lester Brown retired from Earth Policy and closed the institute.

Transition to eco-capitalism

The ideology of eco-capitalism was adopted to satisfy two competing needs:

1. the desire for generating profit by businesses in a capitalist society and
2. the urgency for proper actions to address a struggling environment negatively impacted by human activity.

Under the doctrine of eco-capitalism, businesses commodify the act of addressing environmental issues.

The following are common principles in the transition to eco-capitalism.

Externalities: Correcting of a free market failure

A central part of eco-capitalism is to correct for the market failure seen in the externalization of pollution. By treating the issue of pollution as an externality it has allowed the market to minimize the degree of accountability. To correct for this market failure eco-capitalism would have to internalize this cost. A prime example of this shift towards internalizing externalities is seen in the adoption of a system for carbon trading. In a system like this people are forced to factor the pollution cost into their expenses. This system as well as other systems of internalization function on large and small scales(often times both are tightly connected). On a corporate scale, the government can regulate carbon emissions and other polluting factors in business practices forcing companies to either reduce their pollution levels, externalize these costs onto their consumers by raising the cost of their goods/services, and/or a combination of the two. These kinds of systems can also be effective in indirectly creating a more environmentally conscious consumer base. As the companies who are creating the most pollution face falling profit levels and rising prices their consumers and investors are inclined to take their business elsewhere. This migration of investment and revenue would then be expected to make its way to business who have already incorporated the minimization of pollution into their business model thus allowing them to provide lower prices and higher profit margins attracting the migrating consumers and investors.

Green consumption

At the conception of the ideology, major theorists of eco-capitalism, Paul Hawken, Lester Brown, and Francis Cairncross, saw an opportunity to establish a different approach to environmentalism in a capitalist society. These theorists thought that not only producers but also consumers could shoulder the social responsibility of environmental restoration if "green technology, green taxes, green labeling, and eco-conscious shopping" existed. The resulting "shopping our way to sustainability" mentality encouraged the development of organic farming, renewable energy, green certifications as well as other eco-friendly practices.

A 2015 report from Nielsen lends credence to this theory. According to the report, consumers have more brand loyalty and are willing to pay higher prices for a product that is perceived as being sustainable. This is especially true among Millenials and Generation Z. These generations currently make up 48% of the global marketplace and still haven't hit their peak spending levels. As these generations' preferences continue to shape how businesses operate and market themselves, they could drive a continued shift toward green consumption.

According to the Annual Review of Environmental Resources, "the focus of policy makers, businesses, and researchers has mostly been on the latter (consuming differently), with relatively little attention paid to consuming less". A review of how to encourage sustainable consumption from the University of Surrey shows that, "Government policies send important signals to consumers about institutional goals and national priorities." Governments can pull a variety of levers to signal this including product, trading, building, media, and marketing standards.

Carbon trading

Creating perhaps the first major eco-capitalist endorsement, many political and economic institutions support a system of pollution credits. Such a system, which assigns property rights to emissions, is considered to be the most "efficient and effective" way for regulating greenhouse gas emissions in the current neoliberal global economy. Especially in the case of tradable pollution credits, the resulting market-based system of emissions regulation is believed to motivate businesses to invest in technology that reduce greenhouse gas emissions using positive reinforcement (i.e. ability to trade unused credits) and punishment (i.e. the need to buy more credits).

Full cost accounting

Environmental full-cost accounting explains corporate actions on the basis of the triple bottom line, which is best summarized as "people, planet, and profit". As a concept of corporate social responsibility, full cost accounting not only considers social and economic costs and benefits but also the environmental implications of specific corporate actions.

A breakdown of accounting methodologies by what they include.

While there has been progress in measuring the cost of harm to the health of individuals and the environment, the interaction of environmental, social, and health effects makes measurement difficult. Measurement attempts can be broadly categorized as either behavioral in nature, like hedonic pricing, or dose-response which looks at indirect effects. A standardized measurement of these costs has yet to emerge. This should not be confused with the full-cost method used by organizations searching for oil and gas that "does not differentiate between operating expenses associated with successful and unsuccessful exploration projects".

Genuine progress indicator

The current standard of using the gross domestic product (GDP) as an indicator of welfare is criticized for being inaccurate. An alternative to GDP, the genuine progress indicator compensates for the shortcomings of the GDP as a welfare indicator by accounting for environmental harms as well as other factors that affect consumption, such as crime and income inequality.

Criticisms

Majority of the criticism from traditionally unregulated capitalism is due to eco-capitalism's increased regulation. Pollution credits (as a means for regulating greenhouse gas emissions) is traditionally at odds with economically conservative ideologies. Elements of unregulated capitalism prefer environmental issues to be addressed by individuals who may allocate their own income and wealth, oppose the commodification of by-products like carbon emissions, and emphasize positive incentives to maintain resources through free-market competition and entrepreneurship. 

Proponents of eco-capitalism view environmental reform like pollution credits as a more transformative and progressive system. According to these Proponents, since free market capitalism as inherently expansionist in tendency, ignoring environmental responsibility is a danger to the environment. Approximately 36% of Americans are deeply concerned about climate issues. Proponents of Eco Capitalism typically favor political environmentalism, which emphasizes negative incentives like regulation and taxes to encourage the conservation of resources and prevent environmental harm.

Political theorist, Antonio Gramsci, cites theories of common sense, which suggests that, in general, free market capitalism absent of environmental reform, is ingrained in the minds of its members as the only viable and successful form of economic organization through cultural hegemony. Therefore, the proposal of any alternate economic system, like eco-capitalism, must overcome the predominant common sense and economic status quo in order to develop opposing theories. Nonetheless, movements in the United States and abroad have continued to push for reforms to protect the environment in current capitalistic systems.

Another political theorist, Daniel Tanuro, explains, in his book "Green Capitalism: Why it Can't Work", that for green capitalism to be successful, it would have to replace current mainstream capitalism with Eco-socialist methods, while defying corporate interests:

If by ‘green capitalism’ we understand a system in which the qualitative, social and ecological parameters are taken in account by the numerous competing capitals, that is to say even within economic activity as an endogenous mechanism, then we are completely deluded. In fact, we would be talking about a form of capitalism in which the law of value was no longer in operation, which is a contradiction in terms

However, Tanuro adds that social and economical change to the current capitalist systems is necessary, because technology will invariably increase emissions as manufacturing processes and distribution systems progress. Tanuro argues for changes in three areas:

1. Use of transportation methods
2. Agriculture and dietary changes
3. Overall consumer lifestyle and market spending

Despite this argument, critics still claim that green consumption, sustainable behavior on the part of the consumer, is not enough to be instituted as a socio-environmental solution. In accordance with hegemony, capitalism agrees that the government has little control over market and buyers, sellers, and consumers ultimately drive the market. In contrast, in green capitalism, the government would have more control therefore; consumers do not have direct power over the market, and should not be held accountable. Thus, going against the established monetary system of capitalism in the U.S. and spread throughout the globally. 

Environmental Scholar Bill McKibben proposes "full scale climate mobilization" to address environmental decay. During World War II, vehicle manufacturers and general goods manufacturers shifted to producing weapons, military vehicles and war time goods. McKibben argues that, to combat environmental change, the American Military Industrial Complex and other national arms producers could shift to producing solar panels, wind turbines and other environmental products in an Eco-Capitalist system. 

Scholar Elliot Sperber counters McKibben's argument, citing that industrial environmental mobilization favoring eco-capitalism would exacerbate socioeconomic stratification. Sperber counters the notion that "full scale climate mobilization" and the production it implies is the best immediate solution for addressing climate change. Because Eco Capitalism is still capitalistic, it relies on production of goods. Sperber argues for the production of fewer goods (i.e. fewer plastics, fewer vehicles) to minimize carbon footprints. 

Apparent criticisms have risen concerns and need for social and economical transformation on both ends of the political and theoretical divide. Nonetheless, they have shaped the way the majority public has viewed and contributed to capitalism and continue to both actively change the innate structure of the economic system and enhance it for further economic stability.

Appeal of renewable energy in the capitalist market

Tom Randall, a correspondent specializing in renewable energy for Bloomberg, calls to attention that wind and solar (energy sources) are "outperforming" fossil fuels. In terms of investments, clean energy outperforms both gas and coal by a 2-1 margin. This positive margin may be attributed to the consistently falling price of renewable energy production. Renewable energy sources hold assertive advantages over fossil fuels because they exist as technologies, not fuels. As time proceeds, renewable energy becomes inevitably more efficient as technology adapts. Technologies for extracting fuels may change, but the fuels remain as constants. Both the solar and wind industries have proven growth over time: Over the last 15 years, the solar industry has doubled seven times and the wind industry has doubled four times. In contrast, the fossil fuel industry has declined over the last 15 years. America's coal industry has lost 75 percent of its value within the past few years.

Renewable energy sources also gain advantages over the fossil fuel industry through international governmental support. Globally, governments implement subsidies to boost the renewable energy industry. Concurrently, various global efforts fight against fossil fuel production and use. The demand for renewable energy sources has skyrocketed in the last 15 years, while fossil fuels have drastically fallen in demand (in capitalist societies).

The worldwide concern of climate change (also known as global warming) is notably the largest contributor to the green energy industry's rapid acceleration, just as it is largely responsible for the decline of the fossil fuel industry. The overwhelming scientific consensus of climate change's reality and its potential catastrophic effects have caused a large part of the world's population to respond with panic and immediate action. While the world's response has been strong, environmentalists and climate scientists do not believe the response has been strong enough to counter climate change's effects, and that the transition from fossil fuels to renewable energy sources is moving far too slowly.

The global efforts and concerns of both governments and individuals to take action regarding implementing and transforming a society's energy sources from fossil fuels to renewable energy sources show the enormous potential of the green energy market. This potential is seen in the countless renewable energy projects under way. Currently, there are over 4,000 major solar projects being implemented. These, and all renewable energy projects, set goals of long-term economic benefit.

The Global Apollo Programme, set up by both economists and scientists, has a goal of creating a solar capability that can stand as a cheaper alternative to coal-fueled power plants by 2025. In capitalist markets, solar energy has the very real potential of becoming a direct competitor to coal plants in less than a decade.

Barriers to transition

While there can be many barriers to the transition to a eco-capitalist system, one of the most daunting and forgotten is the systemic barrier that can be created by former models. Dimitri Zenghelis explores the idea of path dependence and the how continuing to build infrastructure without foresight seriously impedes the implementation and benefits of future innovations. Zenghelis uses the term “locked-in” to describe situations where the full implementation of a new innovation cannot be seen because an earlier infrastructure prevents it from functioning well. This barrier is exemplified in older cities like Los Angeles, San Francisco and New York where the infrastructure was designed around urban sprawl to accommodate private vehicles. The sprawl has been researched with the results returning that the moving forward mega-cities need to be constructed as eco-cities if the hope of curving emission levels down is going to have any hope.

Green economy

From Wikipedia, the free encyclopedia

 

The green economy is defined as an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. It is closely related with ecological economics, but has a more politically applied focus. The 2011 UNEP Green Economy Report argues "that to be green, an economy must not only be efficient, but also fair. Fairness implies recognising global and country level equity dimensions, particularly in assuring a just transition to an economy that is low-carbon, resource efficient, and socially inclusive."

A feature distinguishing it from prior economic regimes is the direct valuation of natural capital and ecological services as having economic value (see The Economics of Ecosystems and Biodiversity and Bank of Natural Capital) and a full cost accounting regime in which costs externalized onto society via ecosystems are reliably traced back to, and accounted for as liabilities of, the entity that does the harm or neglects an asset.

Green Sticker and ecolabel practices have emerged as consumer facing measurements of friendliness to the environment and sustainable development. Many industries are starting to adopt these standards as a viable way to promote their greening practices in a globalizing economy.

"Green" economists and economics

"Green economics" is loosely defined as any theory of economics by which an economy is considered to be component of the ecosystem in which it resides (after Lynn Margulis). A holistic approach to the subject is typical, such that economic ideas are commingled with any number of other subjects, depending on the particular theorist. Proponents of feminism, postmodernism, the environmental movement, peace movement, Green politics, green anarchism and anti-globalization movement have used the term to describe very different ideas, all external to mainstream economics.

The use of the term is further ambiguated by the political distinction of Green parties which are formally organized and claim the capital-G "Green" term as a unique and distinguishing mark. It is thus preferable to refer to a loose school of "'green economists"' who generally advocate shifts towards a green economy, biomimicry and a fuller accounting for biodiversity. (see The Economics of Ecosystems and Biodiversity especially for current authoritative international work towards these goals and Bank of Natural Capital for a layperson's presentation of these.)

Some economists view green economics as a branch or subfield of more established schools. For instance, it is regarded as classical economics where the traditional land is generalized to natural capital and has some attributes in common with labor and physical capital (since natural capital assets like rivers directly substitute for man-made ones such as canals). Or, it is viewed as Marxist economics with nature represented as a form of Lumpenproletariat, an exploited base of non-human workers providing surplus value to the human economy, or as a branch of neoclassical economics in which the price of life for developing vs. developed nations is held steady at a ratio reflecting a balance of power and that of non-human life is very low.

An increasing commitment by the UNEP (and national governments such as the UK) to the ideas of natural capital and full cost accounting under the banner 'green economy' could blur distinctions between the schools and redefine them all as variations of "green economics". As of 2010 the Bretton Woods institutions (notably the World Bank and International Monetary Fund (via its "Green Fund" initiative) responsible for global monetary policy have stated a clear intention to move towards biodiversity valuation and a more official and universal biodiversity finance. Taking these into account targeting not less but radically zero emission and waste is what is promoted by the Zero Emissions Research and Initiatives. The UNEP 2011 Green Economy Report informs that "based on existing studies, the annual financing demand to green the global economy was estimated to be in the range US$ 1.05 to US$ 2.59 trillion. To place this demand in perspective, it is about one-tenth of total global investment per year, as measured by global Gross Capital Formation." 

Definition

Karl Burkart defines a green economy as based on six main sectors:

• Renewable energy
• Green buildings
• Sustainable transport
• Water management
• Waste management
• Land management

The three pillars of sustainability.

The International Chamber of Commerce (ICC) representing global business defines green economy as “an economy in which economic growth and environmental responsibility work together in a mutually reinforcing fashion while supporting progress on social development”.

In 2012, the ICC published the Green Economy Roadmap, containing contributions from experts from around the globe brought together in a two-year consultation process. The Roadmap represents a comprehensive and multidisciplinary effort to clarify and frame the concept of “green economy”. It highlights the essential role of business in bringing solutions to common global challenges. It sets out the following 10 conditions which relate to business/intra-industry and collaborative action for a transition towards a green economy:

• Open and competitive markets
• Metrics, accounting, and reporting
• Finance and investment
• Awareness
• Life cycle approach
• Resource efficiency and decoupling
• Employment
• Education and skills
• Governance and partnership
• Integrated policy and decision-making

Ecological measurements

Measuring economic output and progress is done through the use of economic index indicators. Green indices emerged from the need to measure human ecological impact, efficiency sectors like transport, energy, buildings and tourism, as well as the investment flows targeted to areas like renewable energy and cleantech innovation.

1. 2010 - 2018 Global Green Economy Index™ (GGEI), published by consultancy Dual Citizen LLC is in its 6th edition. It measures the green economic performance and perceptions of it in 130 countries along four main dimensions of leadership & climate change, efficiency sectors, markets & investment and the environment.
2. 2009 - 2012 Green City Index  A global study commissioned by Siemens
3. 2009 - 2013 Circles of Sustainability project scored 5 cities in 5 separate countries.

Ecological footprint measurements are a way to gauge anthropogenic impact and are another standard used by municipal governments.

Green energy issues

Green economies require green energy generation based on renewable energy to replace fossil fuels as well as energy conservation and efficient energy use.

There is justification for market failure to respond to environmental protection and climate protection needs with the excuse that high external costs and high initial costs for research, development, and marketing of green energy sources and green products prevents firms from voluntarily reducing their ecological footprints. The green economy may need government subsidies as market incentives to motivate firms to invest and produce green products and services. The German Renewable Energy Act, legislations of many other member states of the European Union and the American Recovery and Reinvestment Act of 2009, all provide such market incentives. However, other experts argue that green strategies can be highly profitable for corporations that understand the business case for sustainability and can market green products and services beyond the traditional green consumer.

Criticisms

A number of organisations and individuals have criticised aspects of the 'Green Economy', particularly the mainstream conceptions of it based on using price mechanisms to protect nature, arguing that this will extend corporate control into new areas from forestry to water. The research organisation ETC Group argues that the corporate emphasis on bio-economy "will spur even greater convergence of corporate power and unleash the most massive resource grab in more than 500 years." Venezuelan professor Edgardo Lander says that the UNEP's report, Towards a Green Economy, while well-intentioned "ignores the fact that the capacity of existing political systems to establish regulations and restrictions to the free operation of the markets – even when a large majority of the population call for them – is seriously limited by the political and financial power of the corporations." Ulrich Hoffmann, in a paper for UNCTAD also says that the focus on Green Economy and "green growth" in particular, "based on an evolutionary (and often reductionist) approach will not be sufficient to cope with the complexities of climate change" and "may rather give much false hope and excuses to do nothing really fundamental that can bring about a U-turn of global greenhouse gas emissions. Clive Spash, an ecological economist, has criticised the use of economic growth to address environmental losses, and argued that the Green Economy, as advocated by the UN, is not a new approach at all and is actually a diversion from the real drivers of environmental crisis. He has also criticised the UN's project on the economics of ecosystems and biodiversity (TEEB), and the basis for valuing ecosystems services in monetary terms.

Homo economicus

From Wikipedia, the free encyclopedia

 

The term homo economicus, or economic man, is a caricature of economic theory framed as a "mythical species" or word play on homo sapiens, and used in pedagogy. It stands for a portrayal of humans as agents who are consistently rational and narrowly self-interested, and who usually pursue their subjectively-defined ends optimally. 

 

Generally, homo economicus attempts to maximize utility as a consumer and profit as a producer. As a theory on human conduct, it contrasts to the concepts of behavioral economics, which examines cognitive biases and other irrationalities, and another mythical species, homo reciprocans, a model which emphasizes human cooperation). In game theory, homo economicus is often modelled through the assumption of perfect rationality.

The notion of "homo economicus" is often used by non-economists to critique an economic approach. There are distinct concepts involved: the preferences that individuals have among outcomes; and the processes that individuals use to make decisions. The question whether individuals are in fact able to make the best choices, given their preferences, leads to the economic definition of rationality, or the so-called "rational economic man". This concept of rationality does not restrict what sort of preferences are admissible.

History of the term

The term "economic man" was used for the first time in the late nineteenth century by critics of John Stuart Mill's work on political economy. Below is a passage from Mill's work that critics referred to:

[Political economy] does not treat the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging the comparative efficacy of means for obtaining that end.

Later in the same work, Mill stated that he was proposing "an arbitrary definition of man, as a being who inevitably does that by which he may obtain the greatest amount of necessaries, conveniences, and luxuries, with the smallest quantity of labour and physical self-denial with which they can be obtained." 

Adam Smith, in The Theory of Moral Sentiments, had claimed that individuals have sympathy for the well-being of others. On the other hand, in The Wealth of Nations, Smith wrote:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

This comment now suggests the same sort of rational, self-interested, labor-averse individual that Mill proposed. Aristotle's Politics had discussed the nature of self-interest in Book II, Part V.

Again, how immeasurably greater is the pleasure, when a man feels a thing to be his own; for surely the love of self is a feeling implanted by nature and not given in vain, although selfishness is rightly censured; this, however, is not the mere love of self, but the love of self in excess, like the miser's love of money; for all, or almost all, men love money and other such objects in a measure. And further, there is the greatest pleasure in doing a kindness or service to friends or guests or companions, which can only be rendered when a man has private property.

Economists in the late 19th century—such as Francis Edgeworth, William Stanley Jevons, Léon Walras, and Vilfredo Pareto—built mathematical models on these economic assumptions. In the 20th century, the rational choice theory of Lionel Robbins came to dominate mainstream economics. The term "economic man" then took on a more specific meaning: a person who acted rationally on complete knowledge out of self-interest and the desire for wealth.

Model

Homo economicus is a term used for an approximation or model of Homo sapiens that acts to obtain the highest possible well-being for him or herself given available information about opportunities and other constraints, both natural and institutional, on his ability to achieve his predetermined goals. This approach has been formalized in certain social sciences models, particularly in economics.

Homo economicus is seen as "rational" in the sense that well-being as defined by the utility function is optimized given perceived opportunities. That is, the individual seeks to attain very specific and predetermined goals to the greatest extent with the least possible cost. Note that this kind of "rationality" does not say that the individual's actual goals are "rational" in some larger ethical, social, or human sense, only that he tries to attain them at minimal cost. Only naïve applications of the homo economicus model assume that this hypothetical individual knows what is best for his long-term physical and mental health and can be relied upon to always make the right decision for himself. See rational choice theory and rational expectations for further discussion; the article on rationality widens the discussion. 

As in social science, these assumptions are at best approximations. The term is often used derogatorily in academic literature, perhaps most commonly by sociologists, many of whom tend to prefer structural explanations to ones based on rational action by individuals. 

The use of the Latin form homo economicus is certainly long established; Persky traces it back to Pareto (1906) but notes that it may be older. The English term economic man can be found even earlier, in John Kells Ingram's A History of Political Economy (1888). The Oxford English Dictionary (O.E.D.) cites the use of homo oeconomicus by C. S. Devas in his 1883 work The Groundwork of Economics in reference to Mill's writings, as one of a number of phrases that imitate the scientific name for the human species:

Mill has only examined the homo oeconomicus, or dollar-hunting animal.

According to the OED, the human genus name homo is

Used with L. or mock-L. adjs. in names imitating Homo sapiens, etc., and intended to personify some aspect of human life or behaviour (indicated by the adj.). Homo faber ("feIb@(r)) [H. Bergson L'Evolution Créatrice (1907) ii. 151], a term used to designate man as a maker of tools.) Variants are often comic: Homo insipiens; Homo turisticus.

Note that such forms should logically keep the capital for the "genus" name—i.e., Homo economicus rather than homo economicus. Actual usage is inconsistent. 

Amartya Sen has argued there are grave pitfalls in assuming that rationality is limited to selfish rationality. Economics should build into its assumptions the notion that people can give credible commitments to a course of conduct. He demonstrates the absurdity with the narrowness of the assumptions by some economists with the following example of two strangers meeting on a street.

“

"Where is the railway station?" he asks me. "There," I say, pointing at the post office, "and would you please post this letter for me on the way?" "Yes," he says, determined to open the envelope and check whether it contains something valuable.

”

Criticisms

Homo economicus bases its choices on a consideration of its own personal "utility function". 

Consequently, the homo economicus assumptions have been criticized not only by economists on the basis of logical arguments, but also on empirical grounds by cross-cultural comparison. Economic anthropologists such as Marshall Sahlins, Karl Polanyi, Marcel Mauss and Maurice Godelier have demonstrated that in traditional societies, choices people make regarding production and exchange of goods follow patterns of reciprocity which differ sharply from what the homo economicus model postulates. Such systems have been termed gift economy rather than market economy. Criticisms of the homo economicus model put forward from the standpoint of ethics usually refer to this traditional ethic of kinship-based reciprocity that held together traditional societies.

Economists Thorstein Veblen, John Maynard Keynes, Herbert A. Simon, and many of the Austrian School criticise homo economicus as an actor with too great an understanding of macroeconomics and economic forecasting in his decision making. They stress uncertainty and bounded rationality in the making of economic decisions, rather than relying on the rational man who is fully informed of all circumstances impinging on his decisions. They argue that perfect knowledge never exists, which means that all economic activity implies risk. Austrian economists rather prefer to use as a model tool the homo agens. 

Empirical studies by Amos Tversky questioned the assumption that investors are rational. In 1995, Tversky demonstrated the tendency of investors to make risk-averse choices in gains, and risk-seeking choices in losses. The investors appeared as very risk-averse for small losses but indifferent for a small chance of a very large loss. This violates economic rationality as usually understood. Further research on this subject, showing other deviations from conventionally defined economic rationality, is being done in the growing field of experimental or behavioral economics. Some of the broader issues involved in this criticism are studied in decision theory, of which rational choice theory is only a subset. 

Other critics of the homo economicus model of humanity, such as Bruno Frey, point to the excessive emphasis on extrinsic motivation (rewards and punishments from the social environment) as opposed to intrinsic motivation. For example, it is difficult if not impossible to understand how homo economicus would be a hero in war or would get inherent pleasure from craftsmanship. Frey and others argue that too much emphasis on rewards and punishments can "crowd out" (discourage) intrinsic motivation: paying a boy for doing household tasks may push him from doing those tasks "to help the family" to doing them simply for the reward. 

Another weakness is highlighted by economic sociologists and anthropologists, who argue that homo economicus ignores an extremely important question, i.e. the origins of tastes and the parameters of the utility function by social influences, training, education, and the like. The exogeneity of tastes (preferences) in this model is the major distinction from homo sociologicus, in which tastes are taken as partially or even totally determined by the societal environment (see below). 

Further critics, learning from the broadly defined psychoanalytic tradition, criticize the homo economicus model as ignoring the inner conflicts that real-world individuals suffer, as between short-term and long-term goals (e.g., eating chocolate cake and losing weight) or between individual goals and societal values. Such conflicts may lead to "irrational" behavior involving inconsistency, psychological paralysis, neurosis, and psychic pain. Further irrational human behaviour can occur as a result of habit, laziness, mimicry and simple obedience. 

The emerging science of "neuroeconomics" suggests that there are serious shortcomings in the conventional theories of economic rationality. Rational economic decision making has been shown to produce high levels of cortisol, epinephrine and corticosteroids, associated with elevated levels of stress. It seems that the dopaminic system is only activated upon achieving the reward, and otherwise the "pain" receptors, particularly in the pre-frontal cortex of the left hemisphere of the brain show a high level of activation. Serotonin and oxytocin levels are minimised, and the general immune system shows a level of suppression. Such a pattern is associated with a generalised reduction in the levels of trust. Unsolicited "gift giving", considered irrational from the point of view of homo-economicus, by comparison, shows an elevated stimulation of the pleasure circuits of the whole brain, reduction in the levels of stress, optimal functioning of the immune system, reduction in cortico-steroids and epinephrine and cortisol, activation of the substantia nigra, the striatum and the nucleus acumbens (associated with the placebo effect, all associated with the building of social trust. Mirror neurons result in a win-win positive sum game in which the person giving the gift receives a pleasure equivalent to the person receiving it. This confirms the findings of anthropology which suggest that a "gift economy" preceded the more recent market systems where win-lose or risk-avoidance lose-lose calculations apply.

Responses

Economists tend to disagree with these critiques, arguing that it may be relevant to analyze the consequences of enlightened egoism just as it may be worthwhile to consider altruistic or social behavior. Others argue that we need to understand the consequences of such narrow-minded greed even if only a small percentage of the population embraces such motives. Free riders, for example, would have a major negative impact on the provision of public goods. However, economists' supply and demand predictions might obtain even if only a significant minority of market participants act like homo economicus. In this view, the assumption of homo economicus can and should be simply a preliminary step on the road to a more sophisticated model. 

Yet others argue that homo economicus is a reasonable approximation for behavior within market institutions, since the individualized nature of human action in such social settings encourages individualistic behavior. Not only do market settings encourage the application of a simple cost-benefit calculus by individuals, but they reward and thus attract the more individualistic people. It can be difficult to apply social values (as opposed to following self-interest) in an extremely competitive market; a company that refuses to pollute, for example, may find itself bankrupt. 

Defenders of the homo economicus model see many critics of the dominant school as using a straw man technique. For example, it is common for critics to argue that real people do not have cost-less access to infinite information and an innate ability to instantly process it. However, in advanced-level theoretical economics, scholars have found ways of addressing these problems, modifying models enough to more realistically depict real-life decision-making. For example, models of individual behavior under bounded rationality and of people suffering from envy can be found in the literature. It is primarily when targeting the limiting assumptions made in constructing undergraduate models that the criticisms listed above are valid. These criticisms are especially valid to the extent that the professor asserts that the simplifying assumptions are true or uses them in a propagandistic way.

The more sophisticated economists are quite conscious of the empirical limitations of the homo economicus model. In theory, the views of the critics can be combined with the homo economicus model to attain a more accurate model.

Perspectives

According to Sergio Caruso, when talking of Homo economicus, one should distinguish between the purely “methodological” versions, aimed at practical use in the economic sphere (e.g. economic calculus), and the” anthropological” versions, more ambitiously aimed at depicting a certain type of man (supposed to be actually existing), or even human nature in general. The former, traditionally founded on a merely speculative psychology, have proved unrealistic and frankly wrong as descriptive models of economic behaviour (therefore not applicable for normative purposes either); however, they are liable to be corrected resorting to the new empirically based economic psychology, which turns quite other than the philosophers’ psychology that economists have used until yesterday. Among the latter (i.e. the anthropological versions), one can make a further distinction between the weak versions, more plausible, and the strong ones, irreparably ideological. Depicting different types of “economic man” (each depending on the social context) is in fact possible with the help of cultural anthropology, and social psychology (a branch of psychology economists have strangely ignored), if only those types are contrived as socially and/or historically determined abstractions (such as Weber's, Korsch's, and Fromm's concepts of Idealtypus, “historical specification”, and “social character”). Even a Marxist theoretician such as Gramsci—reminds Caruso—admitted of the homo economicus as a useful abstraction on the ground of economic theory, provided that we grant there be as many homines oeconomici as the modes of production. On the contrary, when one concept of homo economicus claims to grasp the eternal essence of what is human, at the same time putting aside all other aspects of human nature (such as homo faber, homo loquens, homo ludens, homo reciprocans, and so on), then the concept leaves the field of good philosophy, not to speak of social science, and is ready to enter a political doctrine as the most dangerous of its ideological ingredients.

Homo sociologicus

Comparisons between economics and sociology have resulted in a corresponding term homo sociologicus (introduced by German sociologist Ralf Dahrendorf in 1958), to parody the image of human nature given in some sociological models that attempt to limit the social forces that determine individual tastes and social values. (The alternative or additional source of these would be biology.) Hirsch et al. say that homo sociologicus is largely a tabula rasa upon which societies and cultures write values and goals; unlike economicus, sociologicus acts not to pursue selfish interests but to fulfill social roles (though the fulfillment of social roles may have a selfish rationale—e.g. politicians or socialites). This "individual" may appear to be all society and no individual.

Rational choice theory

From Wikipedia, the free encyclopedia

Rational choice theory, also known as choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior. The basic premise of rational choice theory is that aggregate social behavior results from the behavior of individual actors, each of whom is making their individual decisions. The theory also focuses on the determinants of the individual choices (methodological individualism). 

 

Rational choice theory then assumes that an individual has preferences among the available choice alternatives that allow them to state which option they prefer. These preferences are assumed to be complete (the person can always say which of two alternatives they consider preferable or that neither is preferred to the other) and transitive (if option A is preferred over option B and option B is preferred over option C, then A is preferred over C). The rational agent is assumed to take account of available information, probabilities of events, and potential costs and benefits in determining preferences, and to act consistently in choosing the self-determined best choice of action.

Rationality is widely used as an assumption of the behavior of individuals in microeconomic models and analyses and appears in almost all economics textbook treatments of human decision-making. It is also used in political science, sociology, and philosophy. A particular version of rationality is instrumental rationality, which involves seeking the most cost-effective means to achieve a specific goal without reflecting on the worthiness of that goal. Gary Becker was an early proponent of applying rational actor models more widely. Becker won the 1992 Nobel Memorial Prize in Economic Sciences for his studies of discrimination, crime, and human capital.

Definition and scope

The concept of rationality used in rational choice theory is different from the colloquial and most philosophical use of the word. Colloquially, "rational" behaviour typically means "sensible", "predictable", or "in a thoughtful, clear-headed manner." Rational choice theory uses a narrower definition of rationality. At its most basic level, behavior is rational if it is goal-oriented, reflective (evaluative), and consistent (across time and different choice situations). This contrasts with behavior that is random, impulsive, conditioned, or adopted by (unevaluative) imitation.

Early neoclassical economists writing about rational choice, including William Stanley Jevons, assumed that agents make consumption choices so as to maximize their happiness, or utility. Contemporary theory bases rational choice on a set of choice axioms that need to be satisfied, and typically does not specify where the goal (preferences, desires) comes from. It mandates just a consistent ranking of the alternatives. Individuals choose the best action according to their personal preferences and the constraints facing them. E.g., there is nothing irrational in preferring fish to meat the first time, but there is something irrational in preferring fish to meat in one instant and preferring meat to fish in another, without anything else having changed. 

Rational choice theorists do not claim that the theory describes the choice process, but rather that it predicts the outcome and pattern of choices. An assumption often added to the rational choice paradigm is that individual preferences are self-interested, in which case the individual can be referred to as a homo economicus. Such an individual acts as if balancing costs against benefits to arrive at action that maximizes personal advantage. Proponents of such models, particularly those associated with the Chicago school of economics, do not claim that a model's assumptions are an accurate description of reality, only that they help formulate clear and falsifiable hypotheses. In this view, the only way to judge the success of a hypothesis is empirical tests. To use an example from Milton Friedman, if a theory that says that the behavior of the leaves of a tree is explained by their rationality passes the empirical test, it is seen as successful. 

Without specifying the individual's goal or preferences it may not be possible to empirically test, or falsify, the rationality assumption. However, the predictions made by a specific version of the theory are testable. In recent years, the most prevalent version of rational choice theory, expected utility theory, has been challenged by the experimental results of behavioral economics. Economists are learning from other fields, such as psychology, and are enriching their theories of choice in order to get a more accurate view of human decision-making. For example, the behavioral economist and experimental psychologist Daniel Kahneman won the Nobel Memorial Prize in Economic Sciences in 2002 for his work in this field. 

Rational choice theory has become increasingly employed in social sciences other than economics, such as sociology, evolutionary theory and political science in recent decades. It has had far-reaching impacts on the study of political science, especially in fields like the study of interest groups, elections, behaviour in legislatures, coalitions, and bureaucracy. In these fields, the use of the rational choice paradigm to explain broad social phenomena is the subject of active controversy.

Actions, assumptions, and individual preferences

The premise of rational choice theory as a social science methodology is that the aggregate behavior in society reflects the sum of the choices made by individuals. Each individual, in turn, makes their choice based on their own preferences and the constraints (or choice set) they face. 

At the individual level, rational choice theory stipulates that the agent chooses the action (or outcome) they most prefer. In the case where actions (or outcomes) can be evaluated in terms of costs and benefits, a rational individual chooses the action (or outcome) that provides the maximum net benefit, i.e., the maximum benefit minus cost. 

The theory applies to more general settings than those identified by costs and benefit. In general, rational decision making entails choosing among all available alternatives the alternative that the individual most prefers. The "alternatives" can be a set of actions ("what to do?") or a set of objects ("what to choose/buy"). In the case of actions, what the individual really cares about are the outcomes that results from each possible action. Actions, in this case, are only an instrument for obtaining a particular outcome.

Formal statement

The available alternatives are often expressed as a set of objects, for example a set of j exhaustive and exclusive actions:

${\displaystyle A=\{a_{1},\ldots ,a_{i},\ldots ,a_{j}\}}$

For example, if a person can choose to vote for either Roger or Sara or to abstain, their set of possible alternatives is:

${\displaystyle A=\{{\text{Vote for Roger, Vote for Sara, Abstain}}\}}$

The theory makes two technical assumptions about individuals' preferences over alternatives:

1. Completeness – for any two alternatives a_i and a_j in the set, either a_i is preferred to a_j, or a_j is preferred to a_i, or the individual is indifferent between a_i and a_j. In other words, all pairs of alternatives can be compared with each other.
2. Transitivity – if alternative a₁ is preferred to a₂, and alternative a₂ is preferred to a₃, then a₁ is preferred to a₃.

Together these two assumptions imply that given a set of exhaustive and exclusive actions to choose from, an individual can rank the elements of this set in terms of his preferences in an internally consistent way (the ranking constitutes a partial ordering), and the set has at least one maximal element. 

The preferences between two alternatives can be:

• Strict preference occurs when an individual prefers a₁ to a₂ and does not view them as equally preferred.
• Weak preference implies that individual either strictly prefers a₁ over a₂ or is indifferent between them.
• Indifference occurs when an individual neither prefers a₁ to a₂, nor a₂ to a₁. Since (by completeness) the individual does not refuse a comparison, they must therefore be indifferent in this case.

Research that took off in the 1980s sought to develop models which drop these assumptions and argue that such behaviour could still be rational, Anand (1993). This work, often conducted by economic theorists and analytical philosophers, suggests ultimately that the assumptions or axioms above are not completely general and might at best be regarded as approximations.

Additional assumptions

• Perfect information: The simple rational choice model above assumes that the individual has full or perfect information about the alternatives, i.e., the ranking between two alternatives involves no uncertainty.
• Choice under uncertainty: In a richer model that involves uncertainty about the how choices (actions) lead to eventual outcomes, the individual effectively chooses between lotteries, where each lottery induces a different probability distribution over outcomes. The additional assumption of independence of irrelevant alternatives then leads to expected utility theory.
• Inter-temporal choice: when decisions affect choices (such as consumption) at different points in time, the standard method for evaluating alternatives across time involves discounting future payoffs.
• Limited cognitive ability: identifying and weighing each alternative against every other may take time, effort, and mental capacity. Recognising the cost that these impose or cognitive limitations of individuals gives rise to theories of bounded rationality.

Alternative theories of human action include such components as Amos Tversky and Daniel Kahneman's prospect theory, which reflects the empirical finding that, contrary to standard preferences assumed under neoclassical economics, individuals attach extra value to items that they already own compared to similar items owned by others. Under standard preferences, the amount that an individual is willing to pay for an item (such as a drinking mug) is assumed to equal the amount he or she is willing to be paid in order to part with it. In experiments, the latter price is sometimes significantly higher than the former (but see Plott and Zeiler 2005, Plott and Zeiler 2007 and Klass and Zeiler, 2013). Tversky and Kahneman do not characterize loss aversion as irrational. Behavioral economics includes a large number of other amendments to its picture of human behavior that go against neoclassical assumptions.

Utility maximization

Often preferences are described by their utility function or payoff function. This is an ordinal number that an individual assigns over the available actions, such as:

${\displaystyle u\left(a_{i}\right)>u\left(a_{j}\right).}$

The individual's preferences are then expressed as the relation between these ordinal assignments. For example, if an individual prefers the candidate Sara over Roger over abstaining, their preferences would have the relation:

${\displaystyle u\left({\text{Sara}}\right)>u\left({\text{Roger}}\right)>u\left({\text{abstain}}\right).}$

A preference relation that as above satisfies completeness, transitivity, and, in addition, continuity, can be equivalently represented by a utility function.

Criticism

Daniel Kahneman

Both the assumptions and the behavioral predictions of rational choice theory have sparked criticism from various camps. As mentioned above, some economists have developed models of bounded rationality, which hope to be more psychologically plausible without completely abandoning the idea that reason underlies decision-making processes. Other economists have developed more theories of human decision-making that allow for the roles of uncertainty, institutions, and determination of individual tastes by their socioeconomic environment (cf. Fernandez-Huerga, 2008). 

Martin Hollis and Edward J. Nell's 1975 book offers both a philosophical critique of neo-classical economics and an innovation in the field of economic methodology. Further they outlined an alternative vision to neo-classicism based on a rationalist theory of knowledge. Within neo-classicism, the authors addressed consumer behaviour (in the form of indifference curves and simple versions of revealed preference theory) and marginalist producer behaviour in both product and factor markets. Both are based on rational optimizing behaviour. They consider imperfect as well as perfect markets since neo-classical thinking embraces many market varieties and disposes of a whole system for their classification. However, the authors believe that the issues arising from basic maximizing models have extensive implications for econometric methodology (Hollis and Nell, 1975, p. 2). In particular it is this class of models – rational behavior as maximizing behaviour – which provide support for specification and identification. And this, they argue, is where the flaw is to be found. Hollis and Nell (1975) argued that positivism (broadly conceived) has provided neo-classicism with important support, which they then show to be unfounded. They base their critique of neo-classicism not only on their critique of positivism but also on the alternative they propose, rationalism. Indeed, they argue that rationality is central to neo-classical economics – as rational choice – and that this conception of rationality is misused. Demands are made of it that it cannot fulfill.

In their 1994 work, Pathologies of Rational Choice Theory, Donald P. Green and Ian Shapiro argue that the empirical outputs of rational choice theory have been limited. They contend that much of the applicable literature, at least in political science, was done with weak statistical methods and that when corrected many of the empirical outcomes no longer hold. When taken in this perspective, rational choice theory has provided very little to the overall understanding of political interaction - and is an amount certainly disproportionately weak relative to its appearance in the literature. Yet, they concede that cutting edge research, by scholars well-versed in the general scholarship of their fields (such as work on the U.S. Congress by Keith Krehbiel, Gary Cox, and Mat McCubbins) has generated valuable scientific progress.

Duncan K. Foley (2003, p. 1) has also provided an important criticism of the concept of rationality and its role in economics. He argued that

“Rationality” has played a central role in shaping and establishing the hegemony of contemporary mainstream economics. As the specific claims of robust neoclassicism fade into the history of economic thought, an orientation toward situating explanations of economic phenomena in relation to rationality has increasingly become the touchstone by which mainstream economists identify themselves and recognize each other. This is not so much a question of adherence to any particular conception of rationality, but of taking rationality of individual behavior as the unquestioned starting point of economic analysis.

Foley (2003, p. 9) went on to argue that

The concept of rationality, to use Hegelian language, represents the relations of modern capitalist society one-sidedly. The burden of rational-actor theory is the assertion that ‘naturally’ constituted individuals facing existential conflicts over scarce resources would rationally impose on themselves the institutional structures of modern capitalist society, or something approximating them. But this way of looking at matters systematically neglects the ways in which modern capitalist society and its social relations in fact constitute the ‘rational’, calculating individual. The well-known limitations of rational-actor theory, its static quality, its logical antinomies, its vulnerability to arguments of infinite regress, its failure to develop a progressive concrete research program, can all be traced to this starting-point.

Schram and Caterino (2006) contains a fundamental methodological criticism of rational choice theory for promoting the view that the natural science model is the only appropriate methodology in social science and that political science should follow this model, with its emphasis on quantification and mathematization. Schram and Caterino argue instead for methodological pluralism. The same argument is made by William E. Connolly, who in his work Neuropolitics shows that advances in neuroscience further illuminate some of the problematic practices of rational choice theory.

More recently Edward J. Nell and Karim Errouaki (2011, Ch. 1) argued that:

The DNA of neoclassical economics is defective. Neither the induction problem nor the problems of methodological individualism can be solved within the framework of neoclassical assumptions. The neoclassical approach is to call on rational economic man to solve both. Economic relationships that reflect rational choice should be ‘projectible’. But that attributes a deductive power to ‘rational’ that it cannot have consistently with positivist (or even pragmatist) assumptions (which require deductions to be simply analytic). To make rational calculations projectible, the agents may be assumed to have idealized abilities, especially foresight; but then the induction problem is out of reach because the agents of the world do not resemble those of the model. The agents of the model can be abstract, but they cannot be endowed with powers actual agents could not have. This also undermines methodological individualism; if behaviour cannot be reliably predicted on the basis of the ‘rational choices of agents’, a social order cannot reliably follow from the choices of agents.

Furthermore, Pierre Bourdieu fiercely opposed rational choice theory as grounded in a misunderstanding of how social agents operate. Bourdieu argued that social agents do not continuously calculate according to explicit rational and economic criteria. According to Bourdieu, social agents operate according to an implicit practical logic—a practical sense—and bodily dispositions. Social agents act according to their "feel for the game" (the "feel" being, roughly, habitus, and the "game" being the field).

Other social scientists, inspired in part by Bourdieu's thinking have expressed concern about the inappropriate use of economic metaphors in other contexts, suggesting that this may have political implications. The argument they make is that by treating everything as a kind of "economy" they make a particular vision of the way an economy works seem more natural. Thus, they suggest, rational choice is as much ideological as it is scientific, which does not in and of itself negate its scientific utility.

An evolutionary psychology perspective is that many of the seeming contradictions and biases regarding rational choice can be explained as being rational in the context of maximizing biological fitness in the ancestral environment but not necessarily in the current one. Thus, when living at subsistence level where a reduction of resources may have meant death it may have been rational to place a greater value on losses than on gains. Proponents argue it may also explain differences between groups.

Benefits

The rational choice approach allows preferences to be represented as real-valued utility functions. Economic decision making then becomes a problem of maximizing this utility function, subject to constraints (e.g. a budget). This has many advantages. It provides a compact theory that makes empirical predictions with a relatively sparse model - just a description of the agent's objectives and constraints. Furthermore, optimization theory is a well-developed field of mathematics. These two factors make rational choice models tractable compared to other approaches to choice. Most importantly, this approach is strikingly general. It has been used to analyze not only personal and household choices about traditional economic matters like consumption and savings, but also choices about education, marriage, child-bearing, migration, crime and so on, as well as business decisions about output, investment, hiring, entry, exit, etc. with varying degrees of success.

Despite the empirical shortcomings of rational choice theory, the flexibility and tractability of rational choice models (and the lack of equally powerful alternatives) lead to them still being widely used.