Wednesday, February 17, 2010

Economics and Choice

I just recieved an "invitation" to a conference on "socio-economics" that had attached a file about psychological/sociological questions concerning economics. It was interesting. And it got me thinking about the reasons of individual choice myself.

The article posed that there was no over-arching theory that unified all the facts about economic behavior, which I didn't find very surprising. Economic behavior seems to be at odds with "neo-classical theory".

Of course, there is suggestion that one's upbringing which not only includes one's personal family, but one's culture will determine what will bring about a "rational choice". The values "caught" or taught are internalized into the individual's cognitive frame of reference in decision-making. But, I question this "universal", because, our children were all raised with the same value orientation, but have vast differences in their "rational choices" when it concerns money decisions. So, are their differences due to their birth order, their personality, their peer group influence, or their genetic determination? And how are these understood in the "cut of the pie" (statistically speaking)?

I think that it is imperative to also include the "meaning of money" in a given familial culture. Was money the most important value for the family, or was it just a "means" to an end? And what was the end? Those who have been pampered materially, but impoverished in other ways, have attached certain "meanings" to money that other would not have and give the impression that they are materialistically motivated, but really, they are motivated more by what is meant by the "meaning or value" given to money. Was there a value of liberty, when it came to the choice about money?

Self-perception is also an avenue of exploration in economic behavior. Has the family of origin given a certain perception about the value of the individual due to its emphasis on money and its behavior toward the child in its monetary decisions? But, this variable must also consider the individual child's personality/temperament in economic behavior. Is the child's personality or pre-disposition toward money 'inherited" genetically, or environmentally?

I think that beginning with the assumption that all people will base their choices on economic gain, is short-sighted. There are other values that an individual might hold that are dearer to him. And this is the ultimate mistake of those studying such matters in the West. It is assumed that ALL individuals in the West will consider economic gain as the ultimate value. The unifying value of the West is not money, but liberty. And liberty is the "environment' of capitalistic enterprise.

Moreover, an individual will also change or prioritize certain values over the course of his life, depending on what he is facing, or has to consider. The complexity is astounding, when one begins to think about all the possibilties and probabilities for the individual, much less formulate a universal theory of a whole population. This is why capitalists argue that theirs is the most "productive" means of propering society. It allows the openness and opportunity of all possibilities and probabilities in a given population and individual choice.

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