Towards Dual Interest Theory in Metaeconomics

Abstract

The purpose of this article is to expand the economic discourse beyond single interest as the dominant analytical foundation of microeconomics towards dual interest and metaeconomics. Metaeconomics is based on the reality of joint and non-separable self and other-interest arising because of non-allocable goods and non-allocable inputs. Non-allocable goods are explained by the internal tendencies in the mind to a more primal ego-based self-interest tempered by an empathy-based other (shared with the other, while internalised within the own-self-interest). Non-allocable inputs giving joint products and dual interest in the outcomes are explained by thermodynamics: production is internal to and non-separable from the natural system on the Spaceship Earth. Dual Interest Theory (DIT) assumes that self-interest is accompanied by empathy-based other-interest and that individuals tend to balance both interests in their decisions and behaviour. Several empirical tests of DIT demonstrated its advantages in explaining the observed behavioural outcomes as compared to the consideration of self-interest alone. DIT is also more powerful in explaining many other social phenomena than if one relies on the single/self-interest assumption of microeconomics alone. JEL Codes: A20, D11, D21, D62, D64, H41