Tagged: Economics

Demographic Trends and Economic Prosperity

I am teaching  a class on the philosophy of environmental science and policy, and the question that comes up again and again is how the earth will cope with the tremendous population increase that we are experiencing since 1900. This is an ethical, political, humanitarian, and environmental problem of historic proportions. Less population growth is good, but on the other hand, population growth fuels economic growth. A shrinking population not only causes economic contraction, but it also shifts the median age upward. This means that fewer and fewer young people have to support an increasing number of old people, to...

What are markets? Political and philosophical reflections.

The market mechanism, taught to millions of business and economics students, is not a simple model. Even though it has been studied extensively, the political discussion about the role and applicability of markets often seems confused. A deep fact/value problem distorts the debates about markets and democracy as the cornerstones of Western societies. Is the market mechanism a normative model, a necessary ingredient of efficient economic systems, or does it only refer to a set of scientific laws that describe how a society’s economic activity organizes itself? The following points are food for discussion; I am not advocating a particular economic philosophy. I have already...

Market Mechanism Explained

It seems to be fairly simple, but it raises many questions. To start with: Did Adam Smith describe a law of economics akin to a natural law, or is the market mechanism only a model or idealization that describes an optimal way to produce and distribute goods and services? When economists refer to price in a market, they try to keep considerations of fairness and justice out of the picture and, analyze price simply as an outcome of the forces of supply and demand. But what are these forces and what determines them? The following points describe the mechanism, a...