Classical Economic Theory Analysis

In this paper I want to start with highlighting the ‘Homo Economicus’ image of human beings. A number of classical economic theories rest on the assumption that man is essentially a rational and self interested agent who reasonably calculates and then take decisions. He does what is ‘best’ at a time for him and with no surprise; this ‘best’ can also include benevolence, moral sentiments and even selfish motivations. Further, to corroborate my point, Max Weber’s (1922/1978) contention over human driven instrumental rational action (zweckrational) is also best exemplified in economic transactions of Homo Economicus. This is not to suggest that man is only driven by economic and material interests while performing any social action. Socio – cultural

Boulding’s theory is very much inspired by Adam Smith’s ‘Theory of Moral Sentiments’ (1759/1976a). Boulding’s views on human nature and the philanthropy as benevolence has been taken form Smith’s work and even the separate spheres of economy and grants have been taken form Adam Smith’s moral and economic theories. So while going with the Boulding’s theory, it does not really critique the existing economic theories rather expands the scope of it by bringing in philanthropy and recognizes it as a core element of human nature, modern economy as well as modern economic analysis. He also maintains that real-world grants and exchanges form a continuum with ‘ordinary acts of exchange at one end and charitable gifts on the other, but with a great many intermediate forms and stages’. So he sees a pluralistic economy that leads to human betterment through commercial and philanthropic acts and providing people with civic and market traded goods. So, it points to human nature as both moral and

He also argues that holders of symbolic capital are able to influence and control the thoughts and behaviors of others. For Putnam, the relationship between social capital and philanthropy is a causal relationship. It is the social networks that lead one to one’s good deeds and also reciprocity. So volunteering and philanthropy depend on one’s civic engagement.

Philanthropy relies on feelings of civic duty along with the social responsibility for the well-being of society as a whole. A theory of how man as a societal being becomes concerned for the well-being of society is what discussed in Durkheimian understanding of feeling of belongingness within a social group. And the stronger the degree of cohesion in these groups, the higher the degree of norm conformity.

In the frame of above mentioned references we saw how philanthropy as an economic activity cannot be disembedded from it’s the socio – cultural underpinnings – something which Karl Polanyi (1944) had also argued for. A man is propelled by multiple factors which inspire him into alms – giving. However, economic determinant looks appealing because he assumed to be steered towards ‘zweck’