Optimistic Economics

Seriously, I wonder if Economics is truly dismal because from what I learnt from Tim Harford, Economics always seem to make things more optimistic. That’s also partly because economists tend to be living on the richer side of the world and thus understand that the potential of things and tend to think towards the more hopeful side. This is true especially for David Ricardo who managed to make a fortune out of the study. The gloomy part is almost only about the inequality. But as John Kenneth Galbraith has pointed out about inequality, the problem becomes less of a problem when basic demands are satisfied. That being true, consider John Locke’s notion that all man have a limited capacity for consumption, therefore, even if unlimited acculmulation of wealth is possible with money, the marginal utility of acculmulation should drop theoretically as one grows rich.

Having reconciled the problems with theories and concepts, the study now should focus on the real world application. As a social science, it should be cutting down the barriers to attaining the highly functional world that it postulate to be possible. We all know the problems and in fact, we have a clue what the solutions are. Unfortunately, nothing is initiated such that things can be solved smoothly – or maybe they are only initiated to an extremely limited extent. But either way, the long term theory suggests that things would be better and definitely need not be worst as long as the attitudes of man don’t change. That’s to assume that economics remains to be as important as it is.

That requires us to realise that economics can answer environmental problems and despite the fact that the 2 fields seem to be at odds usually – at least a perception I get from studying Geography, they are actually concerned about the same things. Though being biased to economics, I would say that environmentalist are sometimes to emotional about what they are doing and may exaggerate facts to attain their goals that would have lost their original purpose. Still, I suspect that we can still go wrong theoretically, so why not wait for implementation of ideas to see how things work first…


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