Todd B. Bucholtz refers to economics as ”the study of choice. It does no tell us what to choose. It only help us understand the consequences of our choices…It’s all about scarcity and choice” he added.
For me, economics started as a way to allocate goods in societies given limited resources. Nowadays, is more related with profit. I believe we should keep it to goods.
It is a common mistake to abuse of a model, generalize it and apply it to other aspects. As the ”Law of the Instrument” said: ”if all you have is a hammer, everything looks like a nail”. It is very usual to apply models we know to things we don’t. It is a fast way of trying, but we should admit when it is not running properly, go back to the beginning, and think in a new model ad-hoc, from the scratch. And that’s difficult.
This is what I think about economics: we are so used to markets, that we try to apply it everywhere, and we shouldn’t. Some examples of what you can use money for (From Michael J. Sandjel):
- Prison cell upgrade, USD $ 82 per night.
- The right to shoot an endangered black rhino: USD $150.000.
- The right to emit a metric ton of carbon into atmosphere: USD $18.
- Stand in line overnight on Capitol Hill to hold a place for a lobbyist who wants to attend a congressional hearing: USD $15 to $20 per hour.
Buy the life insurance policy of an ailing or elderly person, pay the annual premiums while the person is alive, and then collect the death benefit when he or she dies. Potentially millions.
Not to mention education or health in my country.
- Tradition (by caste): Handing vital tasks from generation to generation.
Authoritarianism (command societies): Societies ensure their economic survival by the edicts of one authority and by the penalties that supreme authority saw fit to issue.
- Market System: Works easy as: ”each should do what was to his best monetary advantage”.
While the idea of exchange must be very old as man, the idea of gain is not. The world did not born with the bargain searching skills of Groupon lovers. Land, Labor and Capital, the basic agents of production which market system allocates, did not yet exist. They were waiting for being discovered. They were waiting for Adam Smith.
- Murray Rothbard: Economics Was Better Before Adam Smith (nalert.blogspot.com)
- Three Non-Economic Ways of Thinking (cafehayek.com)
- The Father of Economics (wetheindividuals.org)
- Analyzing Emergent Properties of Systems of Decentralized Exchange: Part IIIA of My “The Economist as ?: The Public Square and Economists: Equitable Growth Notes for October 11, 2013 (delong.typepad.com)
- Economics with an ethical dimension (timesofmalta.com)
- Against Growth | A Conversation With Economist Joshua Farley (guidapv.wordpress.com)
- [Economy History] Adam Smith “Wealth of Nations” (hichoi87.wordpress.com)
- The History of Economics & Economic Theory Explained with Comics, Starting with Adam Smith (openculture.com)
- Five most influential economic philosophers (oup.com)