Individualism in Economics: Modeling agents, talking about people

Proposing models built upon unrealistic assumptions poses a serious issue for social
sciences in general –but not for economics. Since Friedman’s methodological insights (1953) assumptions about the agent of the model are irrelevant as long as it has enough predictive power. The latter becomes particularly problematic when econometric models have been introduced in areas like education or healthcare instead of commodities markets. Despite recent efforts from behavioral economics proposing more realistic assumptions (see Camerer, 1999), one idea remains untouched: agents are always individuals. Therefore, they will behave and make choices in a solipsistic way. Based in ideas from developmental cultural psychology (Valsiner, 2014), I will outline the shortcomings derived from such assumption, following the critique to psychological approaches based on the same tenet (e.g. cognitivism). This revision aims to dialogue with the ever-increasing participation of economics in the social discussion, supplementing rather than excluding its ideas.