It Ain’t All About the Benjamins

Economists sometimes get a bad rap by non-economists because we supposedly only care about money (and, to carry that even further, someones only care about the rich).  I can see how such a misconception could arise.  Economists spend a lot of time discussing prices and we often use money as proxies for things.  However, we use money for proxies because many of the things we talk about are not measurable.  It’s currently the best way to measure things.

But do not confuse the proxy for the actual variable of interest.  One of our primary interests in economists is utility, that is the amount of use (or happiness) a person gets from the consumption of a resource.  In other words, a person’s well-being.  Economists generally argue that people are rational, that is they take actions designed to achieve a certain end-goal and increase utility.  Some of these actions may align with acquiring more money, others may not.  For example, I left a well-paying job and took at 80% pay cut to go back to school.  It did not increase my money (obviously), but has greatly increased my well-being.

By focusing on utility, rather than just monetary, goals economists can study, and our theories account for, all kinds of selfless things: altruism, charity, family, etc.

Money is part of what we study, but it is not the major focus of what we study.

2 thoughts on “It Ain’t All About the Benjamins

  1. Yep . . . and it also includes the study of all those selfish things like the desire to control others through manipulation and force, applause-seeking, status, etc.

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