Economics and Goals

Economics is thought of as an objective science which studies, analyzes, makes theories about how human societies operate objectively to produce and distribute goods and services to people. The idea is that societies operate in certain ways and it is the task of economic science to discover all the rules and relationships that would describe the system. But there is no objective fixed system to study. First there are many possible ways societies might be organized. Second all actual systems evolve. They change over time. We are always making new laws which affect how people behave and thus how the system operates. Also we discover new things through science and these often change the economy’s physical processes — the ways things are made, new things are made, new ways of communicating and coordinating human activities are discovered and adopted, new customs and procedures are followed mostly independent of laws. So there is no fixed, objective, system to be studied. At best we must study dynamic — always changing — systems. And we cannot know the future in detail. There are always multiple options for the future. So the idea of developing a theory which will account for present and past activities of “the” system and be able to predict the future — how the system will evolve in the next few years is very difficult and maybe impossible. Further, any theory we may generate will affect how people behave. So any adopted theory affects itself, any adopted theory changes the system, any adopted theory is partly self-fulfilling prophecy.

An economy and political system — and the two cannot be separated in either theory or practice — is characterized by all the laws, customs, rules, etc. that more or less constrain human behavior that in aggregate gives us whatever economic and political system that we have. Any specific economic and political system at any point in time is a result of the evolution of all the laws, customs, human and organizational behaviors that have evolved from past conditions up to that point in time. Systems are constrained somewhat by their past. But they don’t just happen independent of human choices. Our behaviors change the system. New laws, customs, discoveries, as well as natural forces change the system. So individual humans collectively change the system by their collective behaviors. We can’t control it in an absolute sense. We can and continually do try to bend it, to change the system, in ways we think benefit specific individuals, groups, organizations, or in some cases all people, and maybe, in rare cases, the other life on earth too.

So the problem of economics is not to describe, mathmaticize, characterize, or predict the behavior of some fixed objective system. Rather it can only be to discover better ways of organizing our human activities so as to attain or approach goals we have for our economic and political systems. What are the goals? That is the question. Where do the goals come from? They come from individual humans. What do we want our economic and political system to accomplish? Different people have different goals for the system. Most people don’t think in these terms, so they may not consciously have goals for the system. They have goals for themselves. One fundamental goal for all living things is survival. So most people most of the time want to keep on living. So they seek those things necessary for continued survival: food, clothes, shelter, health, knowledge, companionship, freedom, respect, etc. — and in our present system all these are often reduced to money.

Not only individuals want to survive. Organizations also want to survive. They want to survive in the sense that they are organized in such a way as to survive, since if they were not, then they wouldn’t survive. Both individuals and organizations generally want, beyond survival, to thrive, prosper, to develop into something better. So in this sense organizations also have goals such as survival and development. For an organization to survive and thrive all its parts must work somewhat well together towards the organization’s goals. To do that all the parts must have the resources they need to work well together; the parts must communicate with one another; every part must contribute to the working of the system. A well-functioning system must be reasonably efficient but also have some redundancy in case of failures here and there or in case of disruptions from outside the system. So, looking at the whole world as a single economic/political system, some of its goals should be: 1) assuring that all parts have the resources they need to do their part — in particular every human should have the basic human necessities; 2) The parts should communicate well together to better coordinate their activities and not work at cross purposes; 3) Every part should contribute to the whole; 4) There should be some redundancy to allow the system and its parts to survive some internal and external failures and disruptions. Some of these goals have been internalized into humans through our genetic and cultural evolution in the form of strong feelings of justice. Rather, we have evolved strong feelings of aversion to injustice, unfairness, freeloaders (people who don’t do their fair share). So, our grand goal, a goal for economists, politicians, so-called leaders, and indeed all of us, should be to make a system, evolve a system which has the above characteristics. Forget the impossibly constrained mathematical theories. They are a waste of time and energy. Instead one goal should be to progressively modify our systems so that they provide almost all people with the basic human necessities; all the parts (individuals, organizations, nations, etc.,) communicate well so that they may coordinate their activities and cooperate well together; every part should be asked to contribute whatever it can consonant with its individual survival and well-being (no part in a well-functioning machine should wear out or breakdown because the system design puts too much of a burden on it); and a human system must be designed with enough backup processes to compensate for human deficiencies. In other words, we want a system so that system design flaws, or external shocks to the system, do not seriously degrade or destroy it, or seriously harm the parts of the system — both individuals and organizations. Of course both individuals and organizations evolve. The whole system, and the organizations in it, should evolve in ways that do not degrade the quality of life of individual humans; indeed another goal should be to evolve the system so that the quality of life of all individual humans is improved as far as this is possible within the constraints of the earth’s limited resources. In other words, the system should promote the development of individual humans. This is what the science of economics should become.  

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s