implicit assumptions July 25, 2007
Posted by ocmpoma in : economics , trackbackThere are a couple of things economics addresses (or perhaps doesn’t really address) which I find interesting to think about.
One of them, included in the ‘theory of the firm‘, is that businesses exist to maximize profits. I think that this is a fairly interesting assumption. Are we certain that businesses exist to maximize profits (I’m not including non-profit organizations in this)? I’m not so certain of that — don’t some businesses exist for other reasons, perhaps to change the way a certain facet of our lives is led? Or to meet non-financial goals of the owner? Moreover, this assumption is connected to another, implicit part of economics as it seems to be usually practiced: that the ‘business sphere’ is somehow separate from other ’spheres’ of our lives. Certainly any given person doesn’t undergo some sort of magical priority shift when they arrive at work, or start a business, or quit a private sector job to go work for the government — and yet, we seem to think that the Government has a different set of priorities than Business; and that a Worker has different priorities than a Capitalist or a Stay at Home Parent (to say nothing of the implication that the Proletariat has different priorities than the Bourgeoisie). Why is that?
Tags for this article: economics , society
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