Economics is Merely Psychology

In Utopia there is no distinct and separate science of economics. Many problems that we should regard as economic come within the scope of Utopian psychology. My Utopians make two divisions of the science of psychology, first, the general psychology of individuals, a sort of mental physiology separated by no definite line from physiology proper, and secondly, the psychology of relationship between individuals. This second is an exhaustive study of the reaction of people upon each other and of all possible relationships. It is a science of human aggregations, of all possible family groupings, of neighbours and neighbourhood, of companies, associations, unions, secret and public societies, religious groupings, of common ends and intercourse, and of the methods of intercourse and collective decision that hold human groups together, and finally of government and the State. The elucidation of economic relationships, depending as it does on the nature of the hypothesis of human aggregation actually in operation at any time, is considered to be subordinate and subsequent to this general science of Sociology. Political economy and economics, in our world now, consist of a hopeless muddle of social assumptions and preposterous psychology, and a few geographical and physical generalisations.

H.G. Wells, A Modern Utopia (2004)

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