Why Series: Why Economics?

Originally published at davidinman(.net). Please leave any comments there.

I have been wanting to start a new series of posts on this blog, a series that I have come, at least in my mind, to call Why. Why do things work the way they do? This is not an attempt to explain the mysteries of the world and the universe and existence, just to ask questions, and maybe to find some possible answers. To explore. If I could answer such questions with certitude, I’d either be certifiably insane or the supreme dictator of the universe. I’m clearly not the latter and I hope I’m not the former, so I’m looking at this as an exploration - a journey - rather than a destination. So these explorations will typically take the form of ‘Why does [some phenomenon] happen?’ or, the shorthand ‘Why [some phenomenon]?’

Why blog about this at all? It keeps me accountable to actually asking questions - questions l may otherwise avoid out of laziness or complacency - and doing diligence to find reasonable answers. And then, ideally, I could engage in lively conversation with you in the comments and we could all come away more enlightened. Although I have some ideas of the first few things I want to look into, including some that I happen to have some insight into (for example, Why software sucks - and no, it’s not because Microsoft is evil, my Maccy and Linuxy friends, or anything so simple as that), I’d like to take suggestions of what to look into. So if you have an idea, submit in the comments or contact me.

Today is a rather light one: why economics? Not why does the economy work the way it does (clearly almost no one understands that or we wouldn’t've gone through the subprime-mortgage-induced credit crash), but what is economics and why does it exist in the first place?

Wikipedia, the world’s best source of eighty-percent accurate information, defines economics as “the social science that studies the production, distribution, and consumption of goods and services.” That’s a decent enough definition, and I’m willing to accept it with one caveat: that we define the term “goods” to include all scarce resources, real and socially-agreed upon. Let me unpack why I defined it this way. General “resources” so we are not limited only to manufactured goods, but we can include natural goods like beaches, gold, fresh water, and even (in a society with slavery) other human beings. “Scarce” so we can safely exclude goods which are, for present purposes if not in reality, unlimited (e.g., air or solar energy). “Real or socially-agreed upon” because this allows us to consider things like beaches and computers alongside patents (one socially-agreed upon “thing”), and sunlight rights (which is in fact a scarce commodity among the towering buildings of Tokyo). My definition may not be expansive enough, but I feel it’s a good start.

Depending on what terms your favorite science-y author likes to use, humans are hypersocial, supersocial, or ultrasocial creatures. I first came across this concept in Jonathan Haidt’s phenomenal book The Happiness Hypothesis, where Haidt looks at the science of social animals before looking at human sociality, and applying that to human happiness. Although a discussion of how animal ultrasociality works is far beyond what I want to look at here, suffice it to say humans are the only animals we know of that demonstrate sociality that extends beyond kin altruism (helping out other individuals that share a significant amount of genetic material). Humans have developed a complex series of reciprocity-based moral intuitions and tribalism to handle altruism beyond kinship, and the upshot is that we can band together and better survive as a group but still attempt guarantee a benefit to the individual. And this also means that we live in a world formed not only (or even primarily) by our physical environment - grass and trees and apartments and grocery stores - but also in a world of complex social ties of reciprocity and altruism and betrayal and kinship and love. You and I are not cats or horses, who are concerned only with next-of-kin and finding food and copulating. We have these webs of social interactions which give rise to non-kinship relationships like friends and nations and the mafia and a thousand other things. The fact that these social webs exist, regardless of what evolutionary or other process created them, I regard as so obvious it doesn’t require defending. But here we are, and these things exist.

So if economics is the travel and distribution of goods, where do they travel? Obviously among these social webs. This distribution of goods exists in other animals too (a pack of African Dogs may “own” the meat of a kill), but at nowhere near the level of complexity as humans, because African Dogs do not have the same set of complex social interactions. Sometimes goods travel in one direction (e.g., through extortion or bribe or military conquest), but typically two entities come together and they both exchange something that the other entity wants. This is why economists say things like “economics is not a zero sum game” - usually, everyone gets something they want.

But however the details of economics play out in different societies and between societies, we have this thing called economics because we have scarce resources and we are ultrasocial beings. We don’t all simply horde what we have and refuse to exchange goods with one another, and we can’t magically create everything that we want and so are limited by how much of a good exists. And so we engage in distribution and movement of goods, and everyone tries to benefit themselves and their social webs. Economics exists because of scarce goods and human sociality. These two things both give rise to economics and they are the rules of the game.