ECONOMICS IS A SOCIAL SCIENCE

About a month ago I was writing in the UCL Msc in Economics’s forum and proposing a discussion about the fact that Economics uses a lot more mathematics now than in the past. As expected the forum has received many interesting posts. The forum’s discussion is the source of what I’m going to write in next lines.

I agree with what some wrote about the necessity of having some math tools to describe the economic intuition of  a model. In brief, it seems to emerge a certain consensus (at least from the forum) about the fact that Economics needs maths,  and in fact I’ve been using more the Chiang’s maths books for the last three months than the other “real” economics books. Eventually, I have to say that Economics needs Maths as other sciences do.

However, I’d like to shift the core of the discussion towards a different point: what do we want to do of economics? Yes, for what purpose do we want use this science?  I don’t’ dare state that it exists an unique first-best use of economics (that maybe an omniscient social planner has chosen for us!) but maybe it worths thinking about the long run consequences of the various uses we can do of economics and also of other “social” sciences.

“Money, money, money” an old song used to say. Is it all about money? I hope not. However, one use of Economics is, brutally speaking, “making money”. You can get a very good job and earn any amount of money you want. At least in principle. Wrong? Right? Who knows? But most of all, who cares? I think that we wouldn’t never judge others’ decisions. Anyway, it worths remembering what Rau taught us in one of his lecture: economy can go towards barter! Money is not forever (diamonds are!).

When we will have earned all the money available in the system, would we have time to think how to spend it? and more interestingly would we know the reason why we earned that money.

I think this is the point. Why do we want earn money? How many times have you asked yourselves this unavoidable question?  I think we all should try to answer this question. We might realize that there are many different ways to earn money. Each of these has a different outcome on the society we are in.

That’s all, we can’t always choose the “fastest” way when we make our choices. (With or without satisfying the rationality axiom!). We should take into account that we create some externalities. Maybe each us creates an extremely little externality making choices, but the aggregate impact of these externalities can even make people have not enough to eat.

I could give some examples of what I mean when I say: “making choices with a “social” perspective”. This won’t be fair. I am sure you know how to make your “social” choice and I also think that each of us has his own way to make his “social” choice.

Perhaps I’m shifting towards rhetoric, then I had better conclude. Not easy!

I can say to those studying at UCL: we have acquired some important skills and we will acquire others in next months. I invite you to think before to use these skills in the wrong place. Also because we study at UCL and we can’t neglect Jeremy Bentham’s advice: <<…the greatest happines for the greatest number..>>

To all I conclude with Joseph Stiglitz’s words:

<<We can’t, we mustn’t, stay aside confining ourselves to the role of simple and inactive audience.>>

Thank you for your attention and sorry if you feel bored after my words.

Vincenzo Di Maro