What does it mean to use “the economic approach” to thinking about the world?
In the old days, if you asked 100 people this question, I bet at least 80 of them would have given some kind of answer having to do with dollars and cents, supply and demand, etc.
Over the past few decades, however, “the economic approach” has come to mean something far broader. We are grateful practitioners of this movement, the godfather of which is almost inarguably Gary Becker, Levitt’s U. of Chicago colleague and a man who has shown up on this blog repeatedly, most recently for winning the Presidential Medal of Freedom. (He also blogs.)
I was reminded of this the other day while rereading Becker’s book, The Economic Approach to Human Behavior. In the introduction, he beautifully describes what he means by “the economic approach,” and includes an example that seems so brazen at first that it may take your breath away — but after a moment, it makes perfect sense, and you see why Becker’s way of thinking is so unusual and so valuable. See for yourself:
Indeed, I have come to the position that the economic approach is a comprehensive one that is applicable to all human behavior, be it behavior involving money prices or imputed shadow prices, repeated or infrequent decisions, large or minor decisions, emotional or mechanical ends, rich or poor persons, men or women, adults or children, brilliant or stupid persons, patients or therapists, businessmen or politicians, teachers or students … Subsequently, I applied the economics approach to fertility, education, the uses of time, crime, marriage, social interactions, and other “sociological,” “legal,” and “political” problems … Good health and a long life are important aims of most persons, but surely no more than a moment’s reflection is necessary to convince anyone that they are not the only aims: somewhat better health or a longer life may be sacrificed because they conflict with other aims … According to the economic approach, therefore, most (if not all!) deaths are to some extent “suicides” in the sense that they could have been postponed if more resources had been invested in prolonging life.
In addition to regularly being floored by Becker’s thinking, I am also enamored of his writing. I particularly enjoy his use of parentheticals and exclamation points. (It conveys both passion and informality!)
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I’m sorry Dubner, but “an economic approach” is not going to help someone with bipolar disorder, schizophrenia or a host of other human behavior anomalies. This requires “a psychological approach.” (or possibly a psycho-pharmacological approach) In addition, people who get nervous when speaking in public are most likely helped with “a communication studies” approach, as communication anxiety is already well researched. In terms of the human behavior of worship, I’m afraid that “a theological approach” is most likely the best route to explain such things as liturgies, snake handling or speaking in tongues.
You know, I can go on with other human behavior which can be better studied in the various academic departments devoted to such phenomena in the explaination, prediction and control paradigm for many more paragraphs… but I won’t.
When I have a question regarding supply, demand, price, cost-benefit analysis or the distribution of resources… I’ll take “an economic approach.” But to be so brazen as to endorse one method of inquiry as the only lens to look through… more the pity for such an “inquiring” mind.
I’m sorry Dubner, but “an economic approach” is not going to help someone with bipolar disorder, schizophrenia or a host of other human behavior anomalies. This requires “a psychological approach.” (or possibly a psycho-pharmacological approach) In addition, people who get nervous when speaking in public are most likely helped with “a communication studies” approach, as communication anxiety is already well researched. In terms of the human behavior of worship, I’m afraid that “a theological approach” is most likely the best route to explain such things as liturgies, snake handling or speaking in tongues.
You know, I can go on with other human behavior which can be better studied in the various academic departments devoted to such phenomena in the explaination, prediction and control paradigm for many more paragraphs… but I won’t.
When I have a question regarding supply, demand, price, cost-benefit analysis or the distribution of resources… I’ll take “an economic approach.” But to be so brazen as to endorse one method of inquiry as the only lens to look through… more the pity for such an “inquiring” mind.
It kind of gives new meaning to the phrase ‘drop dead.’
It kind of gives new meaning to the phrase ‘drop dead.’
Sylvanus,
I don’t think the point is to use it as the only lens of inquiry, but rather as an additional method of inquiry that may reveal new insights into these other disciplines.
It seems to me that this new “economic approach” is more a study of motivation than anything else, and it’s called economics because they have applied formula and methods from this discipline to previously unrelated disciplines, and found that interesting conclusions can be drawn. While this certainly makes interesting reading, it sometimes feels like the author is finding justification for a statement. It is, however, refreshing to see that creative and inspired thinking is happening. Without knowing more about the subjects on which the authors write, who am I to say that they have come to faulty conclusions?
Sylvanus,
I don’t think the point is to use it as the only lens of inquiry, but rather as an additional method of inquiry that may reveal new insights into these other disciplines.
It seems to me that this new “economic approach” is more a study of motivation than anything else, and it’s called economics because they have applied formula and methods from this discipline to previously unrelated disciplines, and found that interesting conclusions can be drawn. While this certainly makes interesting reading, it sometimes feels like the author is finding justification for a statement. It is, however, refreshing to see that creative and inspired thinking is happening. Without knowing more about the subjects on which the authors write, who am I to say that they have come to faulty conclusions?
Couldn’t you argue that all deaths are murder using the same premise? If we/the state don’t put enough resources into cancer research (for example) then all cancer deaths could be considered murders? Or perhaps manslaughter? “Relativism” anyone?
Couldn’t you argue that all deaths are murder using the same premise? If we/the state don’t put enough resources into cancer research (for example) then all cancer deaths could be considered murders? Or perhaps manslaughter? “Relativism” anyone?