ECONOMICS AND HUMAN SOCIETY

Economics and human society

Table of Contents

The theory of Homo Economicus5

The nature of economic problem5

Ethical implication6

Understanding the economic agency7

Axomization7

Common sense7

Common sense v/s Axomization7

Economic Equilibrium8

Abstraction in economics8

Structure and agency8

Issues8

The structure of social thought9

Axiomatic method and its implications10

Maximizing in economic behaviour10

Economic equilibrium and economic conventions11

The human coordination11

The problem of free action11

Two parties - how it works?11

The third party- the witness12

The ring of invisibility12

Social constructivism12

'The war of all against all'12

The Hobbes problem12

Supervisions and Costs of control13

Independent labourer and responsibility13

Old corruption and the search for self government13

The French revolution14

The causes of the French revolution14

Common action15

The human behaviour15

The economic behaviour15

The moral sentiment15

Rationality and common action16

The importance of competence16

Division of labour16

The free market commonwealth16

The case of Thomas Chalmers16

The significance of French revolution17

The contribution of Thomas Paine17

The ideal community17

Kant and the concept of moral imperative17

Kant and the third party perspective18

The objective view of subjective action18

The view of community18

Economics and the treatment of ethics18

The DAS Adam Smith Problem and implications19

Implication in modern day economics19

Self interest and social interest19

Economics and social disciplines19

Economics and social thought20

The moving from self interest to social interest20

Socialization/ morality argument and utility function20

Morality economics and recent issues20

Economic problem and social crises20

Corporate scandal21

Financial crises21

Social thought to social action21

The future of economics and morality21

The future of morality22

References22

Economics and human society

The theory of Homo Economics

It one of the oldest theories of economics, that pertains to human economics. The theory implies that humans rational and self-interested individuals. They pertain to relate and judge things and phenomena, with regard to their subjective assessments and preferences. The theory is exactly opposite of the theory known as 'homo reciprocans', it implies that humans have innate tendency of improving their surroundings. The model of the theory implies the following;

Humans are subjectively judgmental

Their rationality is based upon enhancing the conditions pertaining to their own livelihood

They are self-interested creatures who operate on the basis of opportunities given to them by certain actions (Porter, 2011, pp. 112-135).

The nature of economic problem

The economic problem pertains to scarcity of resources to satisfy human wants, that is, finite resources to fulfil infinite human needs and desires. The fundamental job of economics pertains to allocation of factors of production to produce the maximum possible output for existing human desires. The economic problem lies in determining 'what to produce' and 'how much to produce'. The premise of economic problem has fundamental pillars, they are;

Needs: they are defined as “material goods that are required by the human beings to fulfil survival requirements”.

Scarce resources: resources are very few, whereas, desires and wants are unlimited.

Opportunity cost and allocation: opportunity cost is defined as “the cost of the alternative forgone against the alternative that is chosen”. The economic problem encompasses of allocating resources for least possible opportunity cost.

The rationality of choice: this pertains to understand social and economic behaviour of human beings when they rationally make choices.

Consistency: In the economic terms, consistency is a dynamic term that changes with preferences over time (Robbins, 2007, pp. 33-37).

Ethical implication

Positive economics

The branch of economics that deals with description and ...