Schmölders rejected rational choice and homo economicus as outdated, drawing on depth psychology.

Evidence

In order to understand people’s financial and economic activity, Schmölders argued, it was inadequate to conceptualize them as rational utility maximizers presuming a “primitive hedonism.” In his view, developments in psychology in the twentieth century had rendered such an understanding of human beings obsolete. Moreover, Schmölders criticized the “eclectic psychologisms” put forward by other economists, in particular by John Maynard Keynes, who used concepts like “liquidity preference,” “saving propensity,” “inducement to invest/save,” or “propensity to consume.” Rather, economists should take the full spectrum of emotional attitudes and psychological motivations into account, making use of the most advanced sophisticated psychological techniques they could find in interdisciplinary exchanges. According to Schmölders, depth psychology rendered the idea of the rational homo economicus absurd. He remarked ironically that it was even more absurd to assume a “gladly giving” or a “stupid” human being, a “homo libenter contribuens” or a “homo stultus,” as some policy-makers apparently did. Against these idealizations or even caricatures, Schmölders emphasized the need for empirical research on the actual behavior of economic actors in real-world situations, as was conducted at his Research Center on Empirical Socioeconomics. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 326

Categorization

• XREF: A major internal contradiction within neoliberal intellectual history — this ordoliberal figures’ anti-rationalism clashes with the rational-expectations and utility-maximizing strands elsewhere in the school; relevant to the reader’s map of internal varieties. — connects to: Schmölders rejected Hayek’s deductive economics in favor of empirical social-science methods — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 329
• DEEPTHINKING: The anti–homo economicus stance inside a thinker usually grouped with neoliberalism complicates tidy genealogies and the very definition of the school.

Broader Connections

• Schmölders rejected Hayek’s deductive economics in favor of empirical social-science methods #expands (0.85) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 329