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I am fascinated by economics. One reason why is that I don’t really understand it, and I suspect that not many other people do either, even though they like to pretend they do.
It is important to at least try to understand how our economic system works, and especially where it’s dysfunctions are, so we have a better idea of the true costs of things. As this Time article points out, when something as basic as food is kept artificially cheap, we don’t make good decisions regarding using our resources wisely and ensuring long-term sustainability. And how can we make good healthcare decisions when the actual economic incentives are so out of whack with what we know will increase efficiency, lower costs and improve care — and when the consumers can’t even know what health care costs, as this Atlantic article illustrates? Perhaps, as The Chronicle Review posits, we are all participating in a massive economic Ponzi scheme, one that is doomed to come crashing down around our ears.
Last year’s collapse of the housing market and major banks was just a first tremor, I think. The question is not if the final crash will come, but when. Our current capitalist system assumes that constant, unchecked growth is not only possible, it is desirable. Just like cancer. I often fantasize about what might replace capitalism once its unsustainability becomes inescapable. Fast Company recently published a fascinating article speculating on three possible future economic systems; my favorite was the European model, called “robonomics,” in which robots do most of the work and people receive a guaranteed income, leaving plenty of time for reading, drinking wine and pondering the meaning of life without work.
Finally, it’s important to remember that old adage: Money does not buy happiness (unless, of course, happiness means a full belly, a roof over your head and adequate health care). Do you know how the average consumer spends most of his or her paycheck? What about those bankers — how should they be spending their outrageous bonuses to achieve the greatest happiness? Fundamentally, economics is linked to human behavior, as unpredictable and illogical as that can be. So perhaps a grounding in behavioral economics can help us make wiser decisions and come out better off — and happier — in the long run.
Sources: Wikipedia; Time Magazine; The Atlantic; The Chronicle of Higher Education Review; Fast Company; Visual Economics; Boing Boing; Harvard Magazine
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