Test Introduction to Economics
“The economic design of modern society and the study of economics”
We begin with a brief reflection on the importance of economy in the world.
It is no stranger to today’s economy plays a fundamental role in society. A very clear example, although local, is the fact that every time you must appoint a Minister in our country, it seems ridiculous to appoint someone who does not have doctorate or not a leading and recognized professional in that area. However, in a portfolio so important to the development and future of Chile as it is the Ministry of Education, the profession is irrelevant or ability who holds the position. This paradox shows us that the valuation in the eyes of the government (and certainly too much of people) about the economy and the role it plays in our lives is so high that we take care of any error management of public finances.
Then try to understand that economics is natural to man, and within this analysis we distinguish between what is happening with both the study of economics as to the economic organization of society, analyzing the thoughts and ideas of various thinkers, and based on the books “The economic organization in a POW camp” by R. Radford, and in “Governmentality” of M. Foucault.
Economy: natural to man?
The economy, we could say that was formed along with the first steps of man on earth since the first residents began to worry, for example, to store food reserves to survive the winter, or sow some products, man has had to deal with various questions, we now consider economic, but in those days obeyed only a practical necessity. Thus, these and no doubt many more questions have occupied the mind of man from those early days. Then, if we understand the economy as defined by Robbins (“science that studies human behavior as a relationship between ends and scarce resources which have alternative uses”), we see that is present throughout the history of mankind, not as science, but if the relationship with scarce resources.
The study of economics and economic organization of society
Since the dawn of humanity, man had to worry about different questions with one principal goal: survival. “The human mind is the basic tool for survival. Man is given life, not survival. He is given his body, not his livelihood. He is given his mind, not its contents. To stay alive, man must act, and to do so you must know the nature and purpose of their actions. “[1] is and has accumulated the knowledge of the art, and gradually developed a far cry from what is now known as “economic science”, but that was a first study of these phenomena. Thus, the man has had to work with his mind to seek a better way to survive.
When prehistoric man realized that he had plenty of leather, bones, and intestines of the animal hunted for food, no doubt should be asked at any minute can I do something with it? Was obtained and shelter, utensils and tools. The same happened at the time of harvest, when he found a surplus, there began a timid and base exchange, the same with men who ran the prison camp of war: “In a week or two, as the volume of trade grew, rough scales began to appear stock exchange. Sikhs […] that had begun changing the corned beef in almost any other food, began to demand ham and margarine, it was found that was worth a can of ham � pound of margarine, and something more, that a ration of cigarettes worth several servings of chocolate, a can of carrots was worth practically nothing “[2] . Then comes the money, which is “just a tool of exchange that can not exist unless there are goods and people capable of producing.”[3]
With this development of man and technology, different conclusions were obtained, and begin to appear and, after many centuries, the first thinkers who presented economic theories, which generally seek to give society a form of organization to help more and better goods and services, using resources more efficiently and proposing ideas for their distribution.
As a first example, and skipping quite a history of human development for obvious reasons, we reached a critical thinker Adam Smith (1723 – 1790), who laid the foundations of the science of economics and the economic model of liberal capitalism. In this sense, Smith says that the economic organization of society is ruled by his famous theory of the “invisible hand”. “Like any individual makes every effort to employ their capital in support of domestic industry, and direct it to the achievement of the product that pays more value, is that each of them works so necessary in obtaining the maximum annual income for society . None is proposed, in general, promote the public interest […]. When economic activity prefers his country to foreign considers only safety, and he directs the first so that their product represents the best value, just think of your own gain, but in this as in many other cases, is led by an invisible hand to promote an end which was not in his intentions. “[4]
We also have Karl Marx (1818 – 1883), who presented a comprehensive interpretation of human life and nature through various writings. “Marx argues that the economy is the living heart of society and therefore capture the truth about modern economics is to understand the most important facts about modern society”[5] But the Marxist theory raised the idea of giving the means of production to the state it was found that was not beneficial to society.
But what is proposed in the text “Governmentality” is a way somewhat intermediate to the two previous, similar to a modern welfare state. In the text, the author notes that “the population will appear as quintessential ultimate goal of the government, because, basically, what could be the goal of this? Certainly not govern, but to improve the lot of the people, increase their wealth, the duration of life, their health. “[6] In this sense, do not share the author’s vision, and Mauricio Rojas’s words can help us to clarify: “The welfare state (in Sweden) were assured to all citizens a comparatively high level of welfare, but at the price an almost total lack of diversity and freedom of choice. “[7] In my view, the State must take care to deliver basic services to the most vulnerable sectors of the population, but the rest, it should “improve their lot” or “increase their wealth,” but should provide a regulatory framework and Safety that everyone can improve their own lot and increase their own wealth.
In conclusion, I think we can say that the economy plays a vital role today. Also, I hope I have given some arguments needed to understand that economics is natural to man, as has been present throughout history. But that does not include any type of economic organization or society will be close to our nature. In my view, that is the system that respects the freedom of individuals to make their own decisions. As Milton Friedman said it “may only be certain combinations of economic and political organizations …”[8] .
Literature
1. – Foucault, M. “The Governmentality” Exhibition held at the College de France, February 1978.
2. – Friedman, M. “Capitalism and Freedom.” Rialp editions. Madrid, 1966.
3. – Greenspan, A. “The Age of Turbulence: Adventures in a New World.” B. Issues – Buenos Aires, November 2008.
4. – Radford, R. “The economic organization of a concentration camp.” Economic, November, 1945.
5. – Rand, Ayn. “Atlas Shrugged”. Editorial Grito Sagrado, Buenos Aires, July 2007.
6. – Rojas, M. “Reinventing the Welfare State: The Experience of Sweden”. Editorial Faes Foundation. Madrid, February 2008.
7. – Strauss, L. Cropsey, J. “History of Political Philosophy.” Fondo de Cultura Econ�mica. Mexico, 2006.
[1] Rand, Ayn. “Atlas Shrugged”. Ed Grito Sagrado, Buenos Aires, July 2007. P. 958
[2] Radford, RA “The economic organization of a concentration camp.” Economic, Nov. 1945. P.3
[3] Rand, Ayn. Ibid. P. 401
[4] Strauss, L. Cropsey, J. “History of Political Philosophy.” Fondo de Cultura Economica, Mexico, 2006. P. 611
[5] Strauss, L. Cropsey, J. Ibid. P. 754
[6] Foucault, M. “The Governmentality” Exhibition held at the College of France, in February 1978. P. 132
[7] Rojas, M. “Reinventing the Welfare State”: The experience of Sweden. Ed Foundation Faes. Madrid, February 2008. P.17, 18
[8] Friedman, M. “Capitalism and Freedom.” Rialp editions. Madrid, 1966. P. 21