Humanistic economics is a distinct pattern of economic thought with old historical roots that have been more recently invigorated by E. F. Schumacher's Small Is Beautiful: Economics as if People Mattered (1973). Proponents argue for "persons-first" economic theories as opposed to mainstream economic theories which are understood as often emphasizing financial gain over human well-being. In particular, the overly abstract human image implicit in mainstream economics is critically analyzed and instead it attempts a rethinking of economic principles, policies and institutions based on a richer and more balanced view of human nature.
Humanistic economics can be described as a perspective that imbues elements of humanistic psychology, moral philosophy, political science, sociology and common sense into traditional economic thought. Or, to define it more formally, contemporary humanistic economics seeks to:
In the process, basic human needs, human rights, human dignity, community, cooperation, economic democracy and economic sustainability provide the framework. At its foundation, humanistic economics seeks to replace atomistic economic man with a more holistic human image. One approach is broadly based on Abraham Maslow’s humanistic psychology.
According to Mark A. Lutz, five characteristic elements of humanistic economics can be summarized as follows: