Economist are often criticised for their use of self interest as the bases for their discipline, because as the critics like to say we humans don’t always act on self-interest, in fact we often act against our self-interest. One example many critics argue, if self-interest model is true then individuals should move to where they are pay the most and tax the least and we should see tax districts competing for talents by reducing tax. Since this is not true, tax districts are not always reducing tax and talents are not always on the move hunting for the best deal, therefore there is a problem with self-interest. Critics argue family ties, sense of belonging are sometime more important then material incentives
Let me say it up front – the critics are simple wrong. They don’t get economics or self-interest. Talents stay even if they are tax higher or pay less precisely because family ties and sense of belonging are considered to be self-interest and calculated accordingly. Emotional wealth felt by being with ones family and feeling belong to certain community is calculated along with monetary materialistic incentives, its all self-interest.
The problem with some economist’s use of self-interest is that their definition of “interest” is incompletely when only material interest in taken into consideration. Part of the problem is that extra-material interest is hard to calculate. Hopefully advance in neuroscience will change this. I have already heard about interesting projects that combine economics with neuroscience.
It’s interesting to note that Daniel Kahneman, who won a Nobel in Economics a few years ago, was a psychologist. And Adam Smith – the father of modem economics was a philosopher. Monetary interest calculation is only one part of economics.
Untimely economics is about society, human and its interaction with each other and the reality. It’s more than math!!!!!
This is my first entry in my Global Standard for a long long time, as I have said in previous entries, I having spending time on my Japanese blog, I think its about time I turn my attention back to GS or another English blog… another English blog did u say? Yeah I am kind of thinking about starting another one, I am not very happy with Blogger. Which is properly one of the reason why having spending so much time away from it.
note this Blogger webmasters!!!!
A blog platform without trackback and categories is just not good enough!!!!