What Economics Can’t Tell Us

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How about the statement that people should not engage in race or sex discrimination? Whatever the emotional worth of such a statement, it’s a value judgment, with no facts or evidence to back it up, plus interpreted literally, it’s nonsense.

Think about it. Discrimination is simply the act of choice. Whenever we choose, we discriminate. When we choose one person for a mate, we discriminate most of the time by race and sex. Would we want a society in which there are penalties for such discrimination?

I’ve had students argue that discrimination by race and sex in marriage is trivial and of little consequence but that there should be equal opportunity in employment. But what is equal opportunity, and how could you tell whether it existed? I’ve asked students whether upon college completion they will give every employer an equal opportunity to hire them. Most often, with a puzzled look on their faces, they answer no. Then I ask, “If you are not going to give every employer an equal opportunity to hire you, why should employers be forced to give you an equal opportunity to be hired?”

When the class discussion turns to the law of demand, sometimes the term “need” arises. A student might say a car, a cellphone and running water are essential needs. My response is that cars, cellphones and running water can’t be essential needs, because people have managed to do without those items for a longer period than they’ve done with them. There’s nothing that people cannot do without, but the consequences might not be very pleasant.

Some might say, “Williams, this thinking of yours is not very compassionate!” That’s right. I believe that being compassionate toward one’s fellow man requires dispassionate thinking and analysis. In other words, we need to think with our brains, not with our hearts.

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  • itfitzme

    Science can survey individuals wants. What fullfills those wants is better then what does not. Perhaps, for consistency with economic terminology, we may simply sue "utility". If the utility of A is greater then the utility of B then A is better then B.

    There is a standard test in the certification of electronic equipment. It is a test for flicker, the effect that equipment has on lighting on the same circuit. A standard bulb of standard brightness in a standard room is made to flicker at varying rates. People are asked, "does this suck". And the measure of to much flicker is obtained by survey.

    So yes, science can answer the question of what is better. And as such, so can economics. All sciences begin with axioms. For economics, the most basic axiom is that alive is better than dead. Even in more basic terms, science can answer the question of whether 120V is better then 240V, when it comes to being dead or alive. The anwser is 120V.

    The issue that arises in economics is that some people don't care about what is better for others. They only care what is better for themselves. But that is easily resolved. a) Economics is a social science, not an individual science. b) If you don't care about others, others are not obligated to care about you. What is better for you becomes irrelevant. They can, they just aren't obligated.

    "Better" simply optimizes average utility and it is measurable. All that is required for science is that it be measurable. All you have to do is ask people, "Is this essential to you?" And if cars, cell phones and running water optimize society's economic utility, then they are essential.

    • ebonystone

      Just because something is measurable doesn't make it science. Nixon got over 47 million votes in 1972, about 18 million more than McGovern. His percentage of the vote was one of the highest ever, so I guess that proves he was one of our greatest Presidents. Science proves it!
      For years, Chevrolet was the best selling car in the world. So I guess that proves it was the best car in the world. Rolls-Royce, stand aside!

    • eleutherophilia

      Suppose a millionaire wants a Monet painting and a homeless man wants some hard liquor.

      Plase quantify in a value-neutral way the relative utility of each want being satistied. To really impress me, use cardinal numbers.

      Now, if you can't do it in this simple case to the general satisfaction of everyone, what are the prospects for your alleged science of objective utility measurement applied to society as a whole?

      Not high, are they?

  • Edisa

    Because God exists and is totally fair, standards exist declaring human beings as equals with each other in God-given rights before Him. Utility alone is not enough for making right decisions, because utility is subjective–based upon the definitions of the persons in power. Utility as a standard enables corruption in power. Because a good God exists, right decisions are possible and can be objective rather than subjective. In fact, people are responsible before a good God to do their best to approximate right decisions and to treat one another with fairness–as they would wish to be treated. Equality is reciprocal. This includes avoiding superficial reasons to reject someone seeking employment, and avoiding a tiered society of unequally applied laws based on superficial differences. Individual equality before the law is not mere subjectivity. It is an objective good, worth seeking to preserve, and worth using as a plumb line for appropriateness in law and practice. The freedoms we appreciate in practice are dependent upon this plumb line–and losing such an ideal will result in loss of freedom eventually, as people forget the traditions that were built using the plumb line.

    • mrbean

      Wealth, in a free market, is achieved by a free, general, “democratic” vote—by the sales and the purchases of every individual who takes part in the economic life of the country. Whenever you buy one product rather than another, you are voting for the success of some manufacturer. And, in this type of voting, every man votes only on those matters which he is qualified to judge: on his own preferences, interests, and needs. No one has the power to decide for others or to substitute his judgment for theirs; no one has the power to appoint himself “the voice of the public” and to leave the public voiceless and disfranchised. Now let me define the difference between economic power and political power: economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman’s tool is values; the bureaucrat’s tool is fear.

  • ebonystone

    Well, you ocnvinced me!