Many of the things that are most valuable in life are not things that can be traded on the market. Love, friendship, the respect of your peers, and a sense of belonging are all incredibly important parts of life, and they’re also impossible to incorporate into economic analysis.
The formalizing of self-interest as an economic principle was largely the work of Francis Edgeworth. It is sometimes wrongly traced back to the work of Adam Smith. While Smith wrote about self-interest, he actually had a much, much more nuanced view of both when people would behave out of self-interest and when self-interested behavior could be good for society then he is usually given credit for.
Men have a clear earnings advantage over women in the current U.S. labor market. Although we normally talk about women being at a disadvantage and earning only 77 cents for every dollar men make, this only serves to reinforce the perception that men are the norm, a standard to which women should measure up.
Economists like to think of much of their work as a scientific description of the world, free of moral or ethical content. The people who write and think about ethics and economics are engaged in normative economics, while those who describe the world as it is practice positive economics.
Making the case that economists should actually read Adam Smith
In Adam Smith’s classic book “The Wealth of Nations” he argues that the production of a country can be divided into three parts: the rent of land; the wages of labour; and the profits of stock.
Loneliness increases ones mortality risk by about as much as smoking, and twice as much as obesity. Loneliness has also been rising the U.S., doubling from 20 percent in the 1980s up to 40 percent today.
Market norms differ from social norms and our society has been moving in the direction of embracing market norms even in non-market arenas.
One of the reasons people may perceive themselves as being worse off even though average GDP is increasing is because they are indeed worse off.
Reviewing Michael Sandel's new book