Robinson Crusoe economy

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Robinson Crusoe economy, or Robinson Crusoe economics is an imaginary construction of an isolated individual and of a planned economy without market exchange.[1]

The model is named after the fictional character Robinson Crusoe who was shipwrecked on an (apparently) deserted island in Daniel Defoe’s famous novel.

Usefulness of the model

Over the years, many critics have derided this so-called "Robinson Crusoe” economics. Obviously, an isolated person is not an accurate description of a modern economy. Rather, before we can analyze an economy composed of billions of interacting people, we should start with just one person and make sure we understand what makes him tick.

Economics has a lot to say even about cases where a single, isolated person takes actions to improve his or her situation. Even an isolated person behaves "economically" because he takes what nature has given him and exchanges the status quo for an environment that he hopes will be more pleasant.[2]


  1. Ludwig von Mises. Human Action, p. 206, "The Theory of Value and Socialism". Referenced 2011-11-23.
  2. Robert P. Murphy. Lessons for the Young Economist, p. 6, 49-65. Referenced 2011-11-23.