The principles of income distribution, upon which Ricardo had based his analysis of the progress of industrialism and on which Marx had rested his theory of the breakdown of capitalism, were replaced by the individual consumer as the major determinant of economic activity and economic progress. The whole economic system was conceived as revolving around him and responding to his needs.

Therefore, any theory of human behavior which is based upon a closed naturalistic view of the world is itself self-referentially absurd when it is pressed to its logical conclusion. Since utility analysis is necessarily attached to such a view, it is doomed because it is essentially dehumanizing and abandons logical and rational thought. As such, this view cannot provide us with the necessary anchor upon which to base our study. For this reason, much of human behavior cannot be explained within the context of the theory. This follows because the very essence of what it means to be human mitigates against such a naturalistic perspective of the universe. This is the case because economic modeling begins by assuming that individuals are utility maximizers. As a result, mathematical analysis requires that individual utility functions be held fixed. The upshot of this assumption is the implicit notion that behavior is determined within the confines of a mathematical model. If that were true, all human action is purely mechanical rather than the result of thought and reflection. While most economists recognize this limitation, as a practical matter, it is very easy to ignore it in the pursuit of one’s research. As a result, it is necessary for economists to take great care in extending our discussions of human behavior to account for the evolution of individual values. In examining this issue, Jennifer Roback Morse notes that human preferences are not fixed and are readily changed.