Globalization for the common good: Economists and psychologists building cultures of peace

MENA Dubai 2003 Abstract

Author Kamran Mofid and Raymond Hamden
Copy Economics and psychology are both sciences of human behavior. This paper gives a survey of their interaction and will highlight how economists and psychologists can work together for the globalization for the common good.

The relationship between economics and psychology is characterized by a phase of economic imperialism and a phase of psychological inspiration. After World War II, the development towards the neo-classical standard model has squeezed almost all psychological content out of economics.

Over the last few years, economics has been inspired more and more by psychology. Today, it is on the way to being accepted even by mainstream economists. It is no longer taken for granted in economics that individuals always act as rational selfish maximisers. It is now seen as important that people have pro-social preferences that extrinsic intensives may harm intrinsic motivation, which people act according to their identities, and that non-selfish behavior is essential for overcoming social dilemma situations.

The close relationship between economics and psychology was recognized at the highest level, when the Nobel Committee for Economics, in October 2002, announced the names of the Economics Laureates, Vernon Smith and Daniel Kahneman. The second recipient, namely, Daniel Kahneman, is not an economist at all, but a psychologist, who in 1990s had started a seminar at Berkeley on psychology and economics. The Prize Committee noted that neo-classical economics, financial or otherwise, is not the wave of the future, because we cannot explain the complexities of 21st century life without understanding behavior as individuals and as a group, considering culture, politics, and ethnicity.

As well as noting this relationship between economics and psychology, the paper will also elaborate on their relationship in the globalization process. As it has been noted, "But the impact of globalization is not just on the globe outside. It is on the globe between the ears".

By bringing economics and psychology together for the common good, the paper, discusses the human implications of globalization – not just the economic globalization we hear so much about – but also human, spiritual, cultural and theological aspects of globalization: How can we order the modern world so that we may all live a happy and peaceful life in this globalize world?