Humanistic economics is a distinct pattern of economic thought with old historical roots that have been more recently invigorated by E. F. Schumacher's Small Is Beautiful: Economics as if People Mattered (1973). Proponents argue for "persons-first" economic theories as opposed to mainstream economic theories which are understood as often emphasizing financial gain over human well-being. In particular, the overly abstract human image implicit in mainstream economics is critically analyzed and instead it attempts a rethinking of economic principles, policies and institutions based on a richer and more balanced view of human nature. According to Schumacher:
Call a thing immoral or ugly, soul-destroying or a degradation of man, a peril to the peace of the world or to the well-being of future generations; as long as you have not shown it to be uneconomic you have not really questioned its right to exist, grow, and prosper.
Humanistic economics can be described as a perspective that imbues elements of humanistic psychology, moral philosophy, political science, sociology and common sense into traditional economic thought. Or, to define it more formally, contemporary humanistic economics seeks to:
- describe, analyze and critically assess prevailing socio-economic institutions and policies
- provide normative (value) guidelines on how to improve them in terms of human (not merely "economic") well-being
In the process, basic human needs, human rights, human dignity, community, cooperation, economic democracy and economic sustainability provide the framework. At its foundation, humanistic economics seeks to replace atomistic economic man with a more holistic human image. One approach is broadly based on Abraham Maslow’s humanistic psychology.
- A history that goes back two centuries and starts with the new political economy of J.C.L. Simonde de Sismondi and extends to E.F. Schumacher and beyond.
- A critique of contemporary micro- and macroeconomic theories, particularly those relating to efficiency, equality, agency, motivation, work, unemployment, comparative advantage, globalization, ecology, social accounting and macroeconomic stability.
- A critical analysis of socio-economic institutions, including property, corporate power, the workplace, and the global institutions governing international trade and finance.
- A normative analysis based on human dignity and basic rights that addresses issues of poverty amidst plenty, economic democracy, ecological sustainability and socio-economic development.
- A realist philosophical discourse opposed to all kinds of nominalism, relativism, scientific positivism, and post-modernism.
- Lutz, M, & K. Lux, The Challenge of Humanistic Economics, Menlo Park, CA: Benjamin Cummings, 1979 ISBN 0805366423.
- Daly, H., and J. Cobb, For the Common Good: Redirecting the Economy Towards Community, the Environment and a Sustainable Future, Boston, MA: Beacon Press, 1994.
- Das, A., A Foundation of Gandhian Economics, New York: St. Martin's Press, 1979.