Economics is not a value in and of itself. It is only a way of weighing one value against
another. Economics does not say that you should make the most money possible.
Anyone with knowledge of firearms could probably make more money working as a hit
man for organized crime. But economics does not urge you toward such choices.
What lofty talk about “non-economic values” usually boils down to is that some people
do not want their particular values weighed against anything. If they are for saving Mono
Lake or preserving some historic building, then they do not want that weighed against the
cost – which is to say, ultimately, against all the other things that might be done instead
with the same resources. For instance, how many Third World children could be
vaccinated against fatal diseases with the money that is spent saving Mono Lake or
preserving a historic building? We should vaccinate those children and save Mono Lake
and preserve the historic building—as well as doing innumerable other good things,
according to this way of looking at the world.
Just another reminder that economics is the study of the use of scarce resources that have
alternatives.
Even if we refuse to make a choice, circumstances will make choices for us, as we run
out of many important things that we could have had, if only we had taken the trouble to
weigh alternatives.
Saving Lives
Few things have saved as many lives as the simple growth of wealth. An earthquake
powerful enough to kill a dozen people in California will kill hundreds of people in some
less affluent country and thousands in a Third World nation. Greater wealth enables
California buildings, bridges, and other structures to be built to withstand far greater
stresses than similar structures can withstand in poorer countries. Those injured in an
earthquake in California can be rushed more quickly to far more elaborately equipped
hospitals with larger numbers of more highly trained medical personnel.
This is just one of innumerable ways in which wealth saves lives.
The Market
What distinguishes “the market” as economists use the term are (1) individual free choice
and (2) the guidance provided by prices which result from millions of people interacting
with one another as they exercise that free choice. To say “the market decides” is only to
say that these millions of people decide.
It is people making their own choices.
Unmet Needs
If economics is the study of the use of scarce resources which have alternative uses, then
it follows that there will always be unmet needs.
Merely demonstrating an unmet need is not sufficient to say that it should be met—not
when resources are scarce and have alternative uses.
By its very nature, as a study of the use of scarce resources that have alternative uses,
economics is about incremental trade-offs—not about “needs” or “solutions.”
Whatever the merits or demerits of various political proposal, what must be kept in mind when evaluating them is that the good fortunes and misfortunes of different sectors of the economy may be closely related as cause and effect - and that preventing bad effects may prevent good effects. It was not accidental that Smith Corona was losing millions of dollars on its typewriters while Dell was making millions on its computers. It was not accidental that Safeway surged to the top of the grocery business while A&P fell from its peak to virtual oblivion. The efficient allocation of scarce resources, which have alternative uses, means that some must lose their ability to use those resources in order that others can gain the ability to use them Typewriters were no longer what the public wanted after they had the option to achieve the same end result and more with computers. Scarcity implies that resources must be taken from some places, in order to go to other places.
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