|
Goals and Benefits
Economists assume that people have goals and act to
obtain those goals. Economists are vague about the goals
people have, though they expect that material advancement
(for self or family) is important for most, and they say
nothing at all about the source of goals or their
desirability. Nonetheless, the assumption that people strive
to obtain their goals as best they can, given the
limitations that the world imposes on them, forms the heart
of virtually all economic theory.
Goals can be complex and a bit fuzzy. Often, it is
hard to see exactly what goal a person has. For example,
there are many people who smoke but say they want to quit.
Such people are at war with themselves. One part pulls them
one way and another part pulls them in the opposite
direction. In addition, people often do not know what it is
that they want, or if they do know what they want, they may
not know how to obtain it. Most of us want to be happy, but
many of us are unsure what that means in terms of how we
should act. People spend time searching for goals, and there
are institutions, most notably organized religion, that try
to convince people that certain goals are more desirable
than others.
In the early part of this century, Frank Knight
emphasized the instability of goals. He wrote:
"Wants...not only are unstable, changeable in
response to all sorts of influences, but it is their
essential nature to change and grow; it is an inherent
inner necessity in them. The chief thing which the
common-sense individual actually wants is not
satisfaction for the wants which he has, but more, and
better wants." 1
Knight argued that "[e]conomic activity is at the
same time a means of want-satisfaction, an agency for want-
and character-formation, a field of creative
self-expression, and a competitive sport."2
These problems of defining goals have played little role
in the way economists have gone about their business, and
critics of economics say it is poorer as a result. Milton Friedman, one of Knight's students, states the way most
economists proceed:
"Despite these qualifications, economic theory
proceeds largely to take wants as fixed. This is
primarily a case of division of labor. The economist has
little to say about the formation of wants; this is the
province of the psychologist. The economist's task is to
trace the consequences of any given set of wants. The
legitimacy of and justification for this abstraction must
rest ultimately, as with any other abstraction, on the
light that is shed and the power to predict that is
yielded by this abstraction."3
People will consider as a benefit anything that
moves them closer to the goal they are seeking. A
businessman running a business will consider revenue as a
benefit if his goal is to make a profit. A person striving
for material advancement will consider more belongings a
benefit. A father who wants his family to be happy will
consider the joy of his child from a gift a benefit.
But economists are not content to be this general. They
want to discuss goal attainment in
mathematical terms.
1The Ethics of Competition
(Univ. of Chicago Press: 1976). p. 22.
2 Ibid. p.
42.
3 Price Theory: A
Provisional Text (Chicago: Aldine Publishing Co., 1962)
p. 13.
Copyright
Robert Schenk
|