Tuesday, January 10, 2012

Beyond economics

This semester I am taking a class on “Law and Economics,” which promises to explain the various economic theories and how they impact the field of law. Although I’m afraid that it will remind me that I like economics from a distance, but easily become somewhat repulsed when I get too close to it. Economics too often reduces everything, especially people, to material things, and those things to artificial currency. There is something dehumanizing about that. As Goethe noted:

When scholars study a thing, they strive,
To kill it first, if it’s alive;
Then they have the parts and they’ve lost the whole,
For the link that’s missing was the living soul.

-Faust, Part one (David Luke trans.)

My first reading assignment started no different. It was full of the stereotypical economic terms like desire, goods, wants, demand, force, resources, happiness, relationship, scarcity, human experience, want, methods -- in short, words that economics stole from physics or metaphysics.

But then the author included some caveats, two of which inspired this post.

In discussing the transition from natural resources to capital (or created) resources, the author stated that “one is almost tempted to carry this reasoning a step further” and apply it to people; specifically, to an educated labor force. “Nevertheless” the author continues, “economists do not classify people as capital resources.” They are something different.

Now, hold that thought while I go into the other point.

In the very next paragraph, the author states that “capital resources, as the term is used in this book, do not include financial capital, such as money, stocks, deeds, or bonds. . . [T]hey are not directly productive. They are merely claims against real resources.”

With those two warnings in mind, that people and financial capital are not (and should not be considered) resources, consider our current economy.

Our recent economic crisis shows just how strongly our economy is based on the financial services sector, which are not true resources. And our workforce and educational emphasis can easily begin to treat people as resources. But if neither of these are truly resources, what is our economy founded on?

In short, I propose the question. Have we forgotten those two basic points of economics? And what would an economy look like that valued real resources over artificial resources and valued people over resources?
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