Building an Economics View: Basic Needs

Building an Economics View:
The Purpose of the Economy
Problem-Solving Mindset
Production and Distribution
Motivations and Incentives
Inequality

I’ve recently noticed that when people say things I disagree with about economics, I find myself tempted to reply with an angry rant. I have no idea why any reasonable person would say something so obviously incorrect, so I feel it must be because they are a bad person, and I treat them as such. But when the fire dies down and I look at what I have said, I realize this is counter to my own philosophy of assuming people are good and peacefully allowing them to disagree with me. This suggests that the problem lies with me, not them.

So what is going on? When I think about it, I realize I’ve been through this before. This anger is a result of cognitive dissonance between my intellectual pride and evidence that one of my views is not well thought out. When I examine my views of economics with a clear head, I find an incoherent jumble of ideas mashed together from all kinds of different sources. One moment I will say something capitalist, the next something socialist, and the next something anarchist, without any notion of how they might fit together or contradict. Clearly this is no good.

With this realization, I have decided to do with economics what I have done in the past with religion and morality, and that is to break apart my crumbling views, sweep aside my cultural influences, and start over from a clean slate. This time, though, I am going to write up the process here on A Scientist’s Fiction, so that you, dear readers, may see my thought process as I go.

The first step, when constructing a view, is to define what we’re talking about. What is economics? The first thing that comes to mind is money, but that is an emergent feature of economics in practice. At a more basic level, economics is the study of the production and distribution of resources. It would be good to have a term that means a specific rule, tradition, or regulation that affects how things are produced and distributed, so let’s call those economic mechanisms. An economic system is a collection of economic mechanisms that work together as a whole.

There are two parts to economics. The first is to study economic mechanisms and systems to find out how they work and what they do. But before we do that, we need to ask ourselves what separates a good economic system from a bad one, or in other words, for what purposes we are producing resources.

About a year ago, we did a series on morality, in which I argued for a version of Utilitarianism that can be summed up as “more good is better.”  Good is defined in another post as the perceptions we get through our moral sense, which is the same kind of sense as our most well-known five senses. The moral sense can be stimulated by circumstances, actions, states of being, etc. These things are not themselves good or bad, but take on a level of goodness when they are paired with someone's moral sense. In line with Deontology, everyone's individual good is equally valid. This gives us a context in which to construct our economics views. We are looking for systems and mechanisms that do as much good for as many people as possible.

Here we run into a problem. Economic mechanisms do very specific things. If “good” is different for everyone, how is it possible to know what kind of economic system will maximize it? What we need is an environment where people can pursue good in whatever form it takes for them. This is the motivation for the idea of basic human rights. The United States Declaration of Independence says “life, liberty, and the pursuit of happiness,” but I am going to be pedantic and say it should have been the pursuit of a good life, because there are other forms of good besides happiness. The measure of an economic system, then, is how easy it makes exercising these rights to as many people as possible.

Some people believe that human rights are a government responsibility, and economics has nothing to do with it. But that view is misguided. If someone does not have enough food, they do not have liberty, because they must spend all of their energy to get food, rather than pursuing a good life. Sure, some people may find good lives by the same actions that get them food, but even for them there is no liberty if there is no choice.

In order for someone to be free to fully exercise their fundamental rights, they require a basic set of needs to be met. What are these basic needs? Well, in order to pursue a good life, people need food and water, shelter, healthcare, transportation, and information. With these five needs covered (I count food and water as one), people have all that they require in order to pursue their own good, whether that be to earn money and live in more luxury, to volunteer for service projects, to plant and tend a personal garden, to contemplate the nature of existence, or any of a billion other ways for people to find meaning in life.

But what determines how much of the five basic needs is enough? After all, a person can live, albeit uncomfortably, on one meal a day. This question is not easy to answer, but at the very least, people should not have to spend energy worrying about how they are going to remain healthy and whether they will have sufficient options available for pursuing purpose. Perhaps we will examine this question more deeply in the future.

We now have a foundation for our views: an economic system or policy is good in proportion to the percentage of people to whom it provides sufficient food, shelter, healthcare, transportation, and information. Of course, a system that adequately provides all of these things to everyone will have its own problems, and maybe we'll have a discussion about them in the future, but for now it makes sense to focus on the problems we face right now.

You may notice that we have not actually talked about any particular economic system or mechanism yet. That is because if we hadn't set up the moral foundation, we would have no way to evaluate it. I am not sure where this series will take us from here, but that is the beauty of constructing a new view. Maybe we will talk about work and purpose. Maybe we will talk about taxation and redistribution. Maybe we will talk about the strengths and weaknesses of the market. Whatever it is, it will be explored in the spirit of curiosity and of making the world better for everyone.