The push for “maximized” profit is at least partially responsible for many of the current economic ills, not the least of which is the incrdibly sloppy underwriting of Fannie Mae/Freddie Mac loans to people who would, under more careful, less “maximized” standards, never have passed loan criteria.

Starting with the “maximization” of personal wants, to unscrupulous realtors, less than diligent bankers, to the quasi-federal underwriters at Fannie/Freddie, it is the “maximation” of greed and profit which seems to dominate.

A settling for “satisfaction” would, of course, have resulted in lower expectations in the short run, less profit, and somewhat more realistic expectations.

Unfortunately, neither economists nor politicians seem unwilling to point out realistic goals, preferring “maximized” goals which may be totally unrealistic in the real world, and lead to disasters such as we are currently experiencing in the real estate sector, the sudden realization of the shortage of oil, the problems in the ecosector, etc.

It is fine to show in a model what may be possible to achieve, as long as the model also shows what is possible under real circumstances. Ceteris paribus cannot be overstated!

But isn’t satisfaction the maximization of one’s utility function? People don’t want “everything” … they want the amount of stuff (physical or otherwise) that gives them maximum satisfaction. But all this can still be expressed within the concept of Homo economicus.