Can Economics solve all the problems in the world?

Question

One of my professors once told me that Economics is one of the only courses that can be used to solve the majority of problems in the world. Do you agree?

Roger C. there is a major flaw in your thinking. you are a Christian right? if you do not know, you should know that the way to convert someone is not by attacking them. enough said

Answer 1

I strongly agree. Economics is the management of scarcity, and just about everything in this planet is scarce. Take water, for instance. Managing such a resource is an economic challenge. Take transportation: the availability of space to build highways and motorways is an economic challenge. Take love: you could not date all the women / men you like since a date is a scarce product (you cannot date two women at the same time, either you date one or the other). Economics is about the choices we make in daily life.

Answer 2

God is the correct answer. However, credit is given only if you show your work to demonstrate why your answer is correct. Economics is a useful tool for showing how to arrive at the right answer. There is actually a fair bit of science behind the biological basis for altruism (see Forgiveness Math, below); it would be great to see the economic basis for being godly.

Back when I was in college (19xx), the econ students insisted that the ten commandments were a great model for societal economic efficiency. I only took a class or three, but I think it can be reasonably quantified.

It won't solve all the problems, but it can at least explain the major ones. Try figuring the costs associated with various sins! Direct costs, opportunity costs, and costs shifted to others.

On the source materials below, I don't recall the exact verses within the chapters, but Eph 4 explores the concept of diminishing marginal utility, Gal 5 lists a number of sins & virtues so you can figure out what you are figuring the costs of, and Exodus 20 is where the ten commandments are.

O'Rourke posits that poverty exists wherever property rights don't (I further posit that terrorism and extremism are facilitated by poverty and reduced or eliminated by fairness, equity, and the prosperity that accompany property rights).

Schumacher is a Keynesian economist, but this work is really worth a look. He seems to understand the end result of the keynesian school (if its premises are taken to their logical conclusions) and to deal with it straightforwardly (advocating the abolition of capitalism as we know it). While that would be a bad idea (IMO), he does challenge assumptions and show a thoughtful take on the world's troubles. How can I, a christian capitalist, agree with Schumacher as a buddhist keynesian? Well I didn't say I agreed, just that he made me think and made some really good points!

Answer 3

Most of the problems that have been solved, progress in science has had a greater effect. Economists just assume the "technology" exist or will come into being if the proper monetary incentives are there. But most of the people in history whose discoveries changed our lives were not motivated by money. Economics is a valuable framework for thinking about problems, but a world without physicists, chemists, biologists, and doctors, would be much worse then a world without economists.

Answer 4

Depends on what you mean by economics. Capitalism is a system. We embrace capitalism for its efficiency not its ethics. It is the most efficient system in the world. Human beings must provide ethics. Efficiency requires freedom. Freedom to acquire wealth requires individual rights. Individual rights are protected by law. If you have these things, then maybe economics can solve a lot of problems. Econmics must develop hand in hand with human knowledge. So we have a limitation here. One of the biggest drivers for commercial activity was the wide-spread adoption of Arithmetic in the 15th century. This provided an efficient method for recordkeeping and provided the foundation for double-entry accounting. So, human progress is related to many different fields, including philosophy. Others link population growth and freedom to economic development. Without freedom, population growth becomes a burden on all if there is no growth and the pie gets smaller and smaller as there are more mouths to feed. So you see, economics exists in the context of human society. Human society is limited by what we know and what we believe. The ancient Chinese believed business and businessmen were useless and this greatly hindered the growth of the Chinese economy even down to the 20th century. Faith in the human spirit is just as important as faith in economics.

Answer 5

I disagree with your professor and some of the people who have responded to your question. Economics and god are not the solutions.

Man has tried many economic systems and inevitably they have all failed. Feudalism, socialism, communism, Nazism, and all the other ism's associated with economics have developed a following, grown in scope and ultimately failed. Even capitalism is in its death throws. All of these economic systems had a sound theoretical basis which made them attractive at some point in time. Unfortunately, they all failed and for the same reason. Everyone of the ism's became corrupted by powerful and greedy people who took advantage of the masses. Sooner or later, the people come to understand that the system is corrupted and they rebel. Subsequently, the masses find another ism to believe in, which in turn also fails. This same scenario has gone on through the ages.

Unfortunately, god is not the answer. He delegated the responsibility to mankind for the duration of his tenure on earth.

Only man can solve the problems of the world. It requires men of vision, who can overcome the assault of greed, power and corruption in the exercise of their duties. Unfortunately, these leaders are hard to come by, and subsequently we witness the continued proliferation of problems in the world.

Answer 6

It sure makes it easier to think about things if you just make every question one of economics. The problem is 1) you will never find a "reasonable person" who is going to always do the "most economically beneficial" thing 2) no matter how hedonic you think you are, you can't put a value on a sunset, or a first kiss or the birth of a new baby. You just can't.

Answer 7

Whoa. Lots of different answers to this question. hmm... my take on it:

Economics is the study of how finite resources are allocated to satisfy the (relatively) infinite demands of a society. It is a scholarly endeavor and like most scholarly endeavors it has no immediate value as a solution without a pragmatic application of its principles.

The basic issue here is that economics is considered by many to be a mature field of study meaning that "we have learned all the big stuff and so the rest is details." I disagree with this mentality as there are many unanswered questions in economics, many of which are "big."

Economics is a steadily developing field of inquiry and understanding. We know a lot more now than we did 400 years ago but there's a lot we don't know. Even if we *did* know it "all" economics would not be able to solve all or most of the world's problems by itself. The reason for this is it is a scholarly field of inquiry. What your professor is probably referring to is more accurately described as "applied economics."

The application of economic principles is something that has been around for a very long time. In my opinion, the "isms" people are referring to should be considered great social experiments. We have learned a great deal about our human nature, both as individuals and as a collective, from the process of these "tries." As two examples, consider the European Socialist movement and the American Capitalism movement.

After European Socialism, we learned about what we now refer to as the "free-rider" problem. This means that when the individuals are rewarded based on the collective production effort of the masses, there is the incentive for each individual to "free-ride" on the others' work effort. Doing so rewards each individual a little less than before because the effort put forth by the "slacker" is less than expected but it rewards the slacker who benefits from the leisure. This is a significant problem in entitlement programs the world over, regardless of the "ism."

In the American Capitalist system (actually this is true of almost any system but it is more prominent in a capitalist structure), the level of value an individual contributes to overall economic welfare is presumed to be rewarded by the society. That means that, in its ideal form, capitalism refers to a system in which individuals perform at their best and get rewarded based on that. The problem with this approach that we are seeing with minority groups, etc in the current day is that capability and effort are not the only determinants of success. Discrepancies in opportunity can also drive differences in wealth/status/etc. The "solution" the American society has come up with is various regulatory programs such as affirmative action. I'm neutral with regard to these approaches because I don't believe there is a "one best" solution, but rather a society as a whole must determine the best solution for itself. However, the premise behind this is basically the realization that there could be black people, white people, green people, blue people, etc that have been oppressed for some time in the past and therefore do not have access to the same opportunities to be rewarded in our capitalistic economy. In order to "compensate" these people after the realization that they CAN in fact contribute positively in an open market, we provide them with "forced" opportunities such as quotas etc. This is also a way to combat bias in a society as a result of previous oppression against these groups. Whether this works or not is another example of a current social experiment.

Many people may not like me calling these "isms" social experiments because it implies that there is some sort of human experimentation going on, possibly without the consent of the participants (citizens) but in my opinion the term "social experiment" is appropriate. These are *social* experiments, not human experiments.

Now, back to your question.

Applied economics might, some day, be able to solve many world problems that are social and quantitative in their nature. Even today, an understanding of economics is beneficial to each member of the society to understand how and why the current system is the way it is and possibly provide insight into possible paths in the future. As a panacea for the world's problems, it fails.

If you're looking for one way of looking at the world which can provide deeper insight into our human condition and the world we create for ourselves? Well, that's not economics... that's called knowledge.

Answer 8

Tell your professor that the only thing that can solve all the worlds problems is GOD!!!!!!!!!!!!!!!!!!!!!!!!!!!!

and anyone who doesn't believe that , well may he have mercy on your poor pitiful soul.

you want to sit here and talk about how math and economics are the answer to the worlds problems, LOL,

there will always be world problems no matter how much math and economics (money) gets sent overseas to keep people from bombing our country and it will continue to be that way until GOD comes and takes those of us whom believe in him home, where we don't have to worry about economics or MATH, hence the answer I gave, the rest of you will be worried about a whole lot more than the problems you have now but don't worry 1+1 will still equal 2


I have attacked no one only stated facts nor am I trying to convert anyone, be who you wanna be, no sweat off my back, if you feel attacked or offended then please forgive me that is not my intention, I take claim to no one religion only that there is one true GOD who sent his son to shed his blood to wash our sins away that you and i may one day relish in all his glory, and then we wont have to worry about worldly problems, that will never be solved until GOD wants them to be solved. no mortal man can ever achieve that, we will live in turmoil, greed and sin until GOD sets us free. Maybe I have totally inturperted your question wrong but nothing will solve ALL the worlds problems except my afforementioned answer like it or not thats just the way it is i can't make it any more simple for you.

Answer 9

Your professor is a socialist. Economics is: individual choices and preferences to satisfy individual wants and needs, using scarce resources.
If governments left everyone alone, and we all made good rational choices and shared a preference for problem solving, things would be better for some and worse for some.

I disagree with the distinguished Marxist professor!

Answer 10

A majority of the physical problems? Yes.

Economics can even solve most emotional problems - if every woman could afford chocolate..... and every man could afford Hackerbrau.....