At least since Thomas Carlyle’s infamous put-down of economics as a dismal science (for economists having the temerity to oppose slavery), it has been popular to disparage economics as a discipline that fosters depression on the one hand and narrow self-interest on the second. Maybe they are both linked, according to the critic.
My personal experiences with economics have been completely different from the claims. The study of economics has instilled in me a deep feeling of gratitude. If you’re thankful for something, you’re appreciative of the benefits you’ve received, according to The Oxford English Dictionary.
This is what I feel.
But it’s not just that simple. The University of California, Davis psychologist Robert Emmons says that gratitude is a feeling that is social since it demands us to look at how we’ve been helped and validated by other people. Economics studies can help us understand the ways that we depend on other people for support. Let’s look at the reasons why.
Ours is a Great Escape
It is impossible to take more than an hour or so to look at economics without seeing an astonishing thing.
The Great Fact. The Great Enrichment. The Great Escape. Whatever you prefer to call it, the story is one that has been told many times, but it isn’t adequately told. For only the second time in our history astonishingly wealthy. This is what it looks like graphically. In just one glance of the data, the per capita average amount of income for an Englishman has increased by about thirty times over the last three centuries. This is despite millennia-long stagnant income growth.
What of us, even if we had a time machine, would we be willing to swap locations to Louis XIV, France’s extravagant Sun King, a symbol of the time of absolute monarchy? This is a great example since his death was right at the edge of prosperity.
Let’s look at just one element of Louis’s journey in this trough of tears that is his health. Before dying of devastation from gangrene (as the moment he gave up the body of his son, Louis cried his words from Psalm 70, O God, I beg you to aid me). King Louis suffered from diabetes for the rest of his life vertigo, boils and boils migraines, and gout. In the event that Louis was an exception and atypical, it was due to the fact that Louis lived to reach 70 years old. Thomas Hobbes’ most famous words that live in the natural world is awry, brutal, and very short, is a perfect description of the entire existence on Earth for the vast majority of the human race’s history. The average of the elites that existed prior to the Great Enrichment enjoyed a standard of living that the majority of us would find unacceptable.
However, Hobbes’ statement is now a joke for more than half of the world’s population. In reality, the majority part of the material divide is not a new phenomenon for mankind since it is the first time in history that the majority of people are rich. According to Nobel Prize-winning economist Angus Deaton, says”Inequality is typically an outcome of advancement. Instead of all people being poor, more than 50% of the population is now rich according to the standards of historical times. The recipients of the 17th century’s extravagant laws–which restricted consumption for the wealthy were, in fact, poor, even according to their standards as American poor. The plumbing they had was primitive, and it contributed to illness. Their calorific consumption was low, and the food they ate was frequently a cause of sickness, while they didn’t have any of the modern conveniences. Based on these facts, we are well on our journey to a place of gratitude.
However, gratitude comes from a different source: the Great Escape is recent. My grandfather, who was born just two months to the day prior to Pearl Harbor, grew up with dirt flooring and attended a school with a single room for grades one to eight. For a typical boy born in the Midwestern United States, this was not a unique circumstance. The chances of you being born in the right place during the story of history’s Great Enrichment are breathtakingly small.
Of course, it’s always possible to spot dismal trends, but the best way to deal with them is always to focus on the upwards. Even a pandemic that is global, wars, prices for gasoline, and rumors of war have not been able to alter the direction of humanity’s trend line from the 1800s. While the majority of Americans think that the world is getting worse, this notion doesn’t match with an array of a variety of data, and each is in direct relation to the human race’s Great Enrichment.
However you interpret it, all evidence suggests the same conclusion: we’re more prosperous than we have ever been. From car crashes that killed people (down) to forest reforestation (up) and the price of the majority of items of daily use as measured by the time it takes to buy them (down) in addition to their high-end quality (up) and the number of cancer deaths per capita (down) The world’s Great Enrichment marches on. Since my birth, more than a billion souls have been gone from poverty to dust.
We Stand on the Shoulders of Giant (Capital Accumulation)
It is an interesting thing to claim credit for this amazing boom in wealth. This certainly won’t increase gratitude in the same way. What is the source of these good fortunes originate? This is complex; however, to echo the words that were expressed by Barack Obama, we aren’t the sole source of it. The vast array of goods that we are able to enjoy is the result of a wide collection of capital goods that our forefathers left us. Machines, mines manufacturing facilities, equipment, and infrastructure are the prerequisites for making such a huge range of goods for consumers.
Building this huge network of capital goods takes effort and time. Saving is the limitation of the current consumption to ensure a future that is brighter. Sacrifice. However, the time component is that savers cannot benefit from all of the advantages in the future. Instead, those who have not made sacrifices are able to enjoy some of the advantages of previous cycles of investing and saving. In the modern world of economics, having this complicated capital structure is an externality positive. Our forefathers enjoyed benefits to us without paying even a cent. Thank you for your generosity.
We Depend on Distant Others
The capital goods would not be of much value without workers. The work-to-work divide is a worldwide phenomenon today more than ever before. It was Adam Smith observed in 1776 that the woolen coat that protects everyday laborers against the harsh elements was the result of a variety of unnamed individuals working together. It is impossible for an individual to develop an original pencil and a good coat, and definitely not a cellphone. We are, according to Paul Seabright puts it, in the presence of strangers.
The same thing that was true back in Smith’s day has amplified a hundredfold in our day. Take a look at the magnitude of trade between nations since World War II. Because the exchange isn’t a zero-sum game, it has both sides benefiting–we don’t only depend on a variety of unknown others, but we also help them through our dependence.
Economics can teach us that the most important display in societies that are based on Hume’s three-pronged model of property, consent, and contract is coordination and cooperation rather than conflict or competition. In addition, the evidence suggests there is evidence that increasing societies are attempting to achieve that Humean ideal.
The study of economics reveals our interconnected dependence. The result is a spontaneous bursting of gratitude. We realize the fact that we, each in a market-based society, are serving our neighbors and are assisted by our neighbors. No one of us could be able to make it on our own, hermit-style. We only earn income by providing to others something they are able to value enough to pay for it with their own hard-earned money. Once we grasp this concept that we can no longer see other people as competitors in a desperate market to get limited resources. Instead, we see them as a source of our prosperity. We are aware that their success is not at our expense.
The exchange turns strangers into friends.
Collaboration via the sharing of work can do more than simply deliver products. Commercial activity and exchange transform Seabright’s stray visitors into friends and sometimes acquaintances. The notion that commerce makes its participants and encourages the virtues of honesty and diligence and thrift is a long-standing tradition in economics. It was Montesquieu and Smith making arguments in this direction.
As Mises discusses in his epic book, Human Action, an exchange is a catalyst that transforms people who are isolated into society. The term catallactics can be used to describe economics (or less frequently called the symbiotics) which comes in reference to the Greek word catallaxy, which is a profound description of changing an adversary into an ally through an exchange.
The exchange system dramatically expands our numbers of friends over what is possible in a world where we pursue our own unique, self-sufficient production. In return to my grandfather’s home for an instant, his business journeys took him across the world, allowing him to establish friendships with people from cultures that, just an era ago, were closed to all Western contacts.
Of course, it’s an error to adopt a Pollyannaish perception of the world. First, progress in material terms is not automatic. It’s contingent upon getting the economic institutions in order. Although the specifics remain the focus of intense discussion, economists are all in agreement that formal and informal institutions–the rules of the game–can either hinder or aid in the accumulation of capital and division of labor mentioned. One of the most famous examples is to contrast the differing results from South as well as North Korea. In Hume’s theory, property, contracts as well as consent are institution-wide substrata that lead to capital accumulation and division of labor that, ultimately, result in prosperity.
Another reason is that there’s an ongoing real-world poverty situation in the world (about one billion people worldwide), and not everyone in the world’s most prosperous countries has a comfortable life, and real injustice at a variety of levels is still prevalent. These facts provide a reason to pursue the kind of reform in institutions that have brought the right to justice and increased prosperity for many other people. It isn’t an excuse for indifference, and it is not indefensible support for the status of the game. In fact, those who are grateful would like to see the kind of wealth they’ve enjoyed extended to people in the near and distant. Economic science also has the recipe for prosperity, if we can hear.