The Biopsychosocial model (BPS) seeks to understand economic social development through the Epistemology, Anthropology, and Ethics. All economic systems are fundamentally based in human development. By broadening the scope of economic theory beyond the limited perspectives of finance a greater “truth” can be found. The authors Canadas & Giordano (2010) postulate that using additional constructs helps balance out the limited assumptions of major economic models.
All economics is based off of innovative development. This development is inherently social by nature but also includes biological development and psychological processes. Humans make decisions at a very fundamental neurological level which impacts the decisions they make. These decisions impact how the economy develops and the decisions society makes.
Epistemological Component: Understanding how people make decisions impacts the overall success of the economy and the way in which the economy leans. Milton Friedman believed that all predictions of the market could be wrong but are approximately true; at least to those making the assumptions. Each market works under basic economic assumptions that impact the way people think, how they obtain resources and how they spend those resources.
Anthropological Approach: The total human and all of his benefits and detractors live within the economic system. Seeing humans through a biological, social, and psychological approach helps in understanding how they make decisions to further their interests and survival. Understanding and predicting human behavior can help in solving economic problems.
The Ethical Component: All resource allocation decisions are moral questions. According to von Hayek, “economic activity provides the material means for all our needs” (von Hayek, 1962, 49). Each human makes economic decisions based upon how fair and equitable distribution of rewards should be realized. Economics should consider the common good and social stability within its policy decisions.
To the authors, humans innovate their environment. This innovation comes from collaborative efforts that create “collective intelligence” that helps to create greater tools for resource attainment. Economics is often focused on high ended and easily measurable economic tools but often forgets the “real” factors that lead to economic activity. Most economists are now coming to the conclusion that simply money measuring is not enough and human behavior must be part of the process of prediction.
As humans developed throughout history economic exchanges encouraged the development of collective intelligence. This collective intelligence comes from how people make decisions that lead to divisions of labor, mutual beneficial knowledge, and facilitate human development and speeds up cultural and economic development. It is humans interacting with each other and developing off of each other that lead to the highest societal and economic growth.
Canadas, A. & Alejandro, G. (2010). A Philosophically-based Biopsychosocial Model of Economics: Evolutionary Perspectives of Human Resource Utilization and the Need for an Integrative, Multi-disciplinary Approach to Economics. International Journal of Interdisciplinary Social Sciences, 5 (8).
Von Hayek, Friedrich A. The moral element in free enterprise. In The morality of capitalism, ed
Mark W. Hendrickson, 49-57. New York: Irvington-on-Hudson, 1962.