Rethinking Economics: From Classical Assumptions to Cognitive Reality

Modern economics inherited its form from eighteenth-century moral philosophy. Concepts like self-interest, equilibrium, and utility were not discovered—they were imagined, then later formalized into mathematics without empirical grounding.

These abstractions gave the field elegance but not mechanism. They describe how economists think markets should behave, not how real humans or other social species actually coordinate and exchange.

This work revisits those foundations through evidence from anthropology, behavioral science, and cognitive science— reconstructing the origins of economic behavior as they actually emerge in real social life.

Since the eighteenth century, economics has drawn its view of human behaviour from moral philosophy rather than empirical observation. Ideas that began as heuristics in the writings of Adam Smith—about self-interest, exchange, and the harmony of markets—gradually hardened into the axioms of classical theory.

Although anthropology, psychology, and behavioural research have since challenged these assumptions, the discipline continues to build upon them as if they were empirical truths.

Here we re-examine seven canonical claims that still frame economic thought: the myth of barter, the doctrine of self-interest, the rational actor, the utility function, the aggregation of individuals, the equilibrium ideal, and the invisible hand. For each, we trace its intellectual origin and contrast it with contemporary evidence on how people actually coordinate and exchange.

Together, these cases reveal a discipline built on historical invention rather than observation, and show how economics can be re-anchored in real human behaviour.

For centuries, economics has explained markets through elegant mathematics built on imagined assumptions—rational agents, equilibrium, and utility—none of which were ever grounded in real behavior.

This mathematical elegance gave the discipline authority but detached it from observation. Theories describe how markets should behave, not how people actually act, cooperate, or create value in daily life.

Reconnecting economics with evidence from anthropology, behavioral science, and cognitive science allows us to recover what was lost: a description of exchange that begins with social reality, not abstraction.