A Cross-Analysis of Economics and Philosophy

This is a cross-examination of two subjects: economics and philosophy. At first glance these subjects are different. Economics has multiple definitions, but it could be thought of to be the interaction of different agents with money. Philosophy also has multiple definitions since it has many schools of thought such as epistemology, metaphysics, ethics, aesthetics; the list goes on and on. But, it could be thought of to be the interaction between a person and some fundamental aspect of existence in order to learn more about it. Already, both of these subjects have their similarities and dissimilarities. Both involve some interaction, but they interact with different aspects. And so, to study these subjects, it can be said, for both, that they entail understanding the world that we live in. These understandings wish to comprehend different parts of the world. Economics seeks the world that humans have created that now runs deep such that removing it would lead to chaos. On the other hand, philosophy seeks the world as it was found - the dirt, the trees, the water, the sky, the sun, everything beyond, everything in-between, and everything within; what is the meaning of these elements, what does it mean to perceive these elements and what does this perception signify for our existence? These are very different worlds, where one is precise and unchanging in its rules, while the other is an amorphous fabric that knowns no bounds. But at both of their cores, it comes back to the human being. What are the implications of basic economics to a person, and likewise, what is the case with philosophy?

In the head of the writer, all things make sense whilst engaged in the act of typing until a jarring noise is sounded and the real world opens up which is where the reader lives. And in the life a reader, they continually take visits into the funhouse of a writer’s mind but with their feet still grounded in the real world (though consummate talent has the effect of making one fly). So one may wonder what is the point of this comparison. The point is multifaceted. Economics and philosophy are two opposing subjects and fields of study and thus are the products of two different intentions even though when they are expressed vaguely (understanding the world) they seem somewhat similar. It means that economics and the way economics is implemented in the world is colossal to the extent that it is the basis of everybody’s life. But is the basis of life not…life? The very function to live? Should that not be it? Perhaps. But it is not. That is one aim of this essay. To understand this connection (and the writer should try not to make this a didactic reproach on greed, even though greed always seems to be the answer to why many problems arise). Note that this is in regards to basic economics, not developmental economics because once the former is understood, hope is regained in the latter. And once again, do note that basic economics in practice is cruel, but in theory can be quite fascinating. Here is the second aim of this essay. The relationship between theory and practice in economics and philosophy. In economics, the consumer is on a curve in a graph, whose principals can be ruthless. In philosophy, the person is everything. Many of the questions try to understand consciousness and human nature, and this depth and understanding, lends a certain sympathy to the helpless number on the graph. That is the second aim of this essay. Thus, this piece wishes to compare economics and philosophy under different lights.

To begin, the first aim. The world is constantly progressing. New architecture, new cars, new phones, new technology, new discoveries, new innovations. Our world seems to be defined by change. But what brings about that change? A large part is undoubtedly played by economics. The economy, specifically microeconomics, because that field focusses on industries, firms, and households, who generally have the main goal of gaining. Industries want to grow, firms want to gain higher profits, and households and consumers want a better deal - lower prices, higher quality. This is definitely a bit of a generalisation. Not all industries, firms, and households are so cut-throat. Richard Thaler, the Nobel laureate in economics and father of behavioural economics, defines cut-throat consumers as ‘econs’, who only live in theory and do in exist in the real world. econs have perfect knowledge, are rational, have complete self-control, are unbiased, and only seek to maximise utility. There are more characteristics, but the few listed suffice. Humans, on the other hand, are the complete opposite (though sometimes the characteristics can overlap, like with trying to maximise utility There are two types of thinking that a consumer can subscribe to as well. The first system is automatic thinking. It is instinctive and intuitive. Effectively, in this system of thinking, one is not really thinking, rather it is like muscle memory. It is often based in habit, which can lead to bad economic decisions. The other form of thinking is reflective thinking, where the consumer evaluates all of the options to arrive at the best decision. According to neoclassical economics, everybody uses reflective thinking, but in actuality, only econs use reflective thinking all of the time and humans, more often than not, utilise automatic thinking.

However, this essay wishes to deal with the theory only, for is theory not the purest form of the subject? Moreover, it is only when we implement the pure theory without interventions that we can see the uncontrolled effects. Of course, that is why there are economic interventions from the government and other financial institutions. But, what this essay wishes to seek is the intrinsic nature of economics and philosophy (philosophy on the other hand does not really have a practical counterpart, though stoicism and epicureanism can be thought of as lifestyles, thus the theory penetrates into the temporal world, yet they are still abstractions and theory that alter one’s thinking at a profound level), thus theory is where we remain.

So, at the root of the objectives of the economic figures at the micro-scale - industries, firms, and households - there is money. Revenue, profits, income. Why is money the covetous award for hard work? Isn’t money man-made? A figment of our thinking? A concept? Yes. But it is very real. It is the lifeblood of the modern world. It is injected intravenously into the networks and connections - producers, manufacturers, suppliers, wholesalers, retailers, consumers, then back to the firms, and the world functions on that, on that loop. Money is the basis of our lives. It has usurped that position from life itself, for even in death, money and debt persists in one’s name, in one’s legacy. And money is what leads to inequality, whose declivity keeps steepening. Because, if we were born naked as one naturally is but also in terms of background and parentage, if everybody was born on a blank white canvas then we would all be the same (philosophy would seem to operate more so on these grounds; however, I would even say that the human is not even considered to that extent; the human in philosophy is more of a vessel in that it is the mind that is more heavily covered in epistemology and metaphysics since it is essentially the mind that is interacting with the natural world through sense-perception). Unfortunately, standards then appear and based on standards nobody is equal and today’s standard as was today’s standard a hundred years ago, is money. If it is man-made yet so large that it may well be a primordial force, something must have led to its creation; it must have been created to cater to some need, and considering for how long it has carried on, it is likely something fundamental within human characteristics. It is greed; Mammon takes great care of it. It is the difference between the idealist and the realist. The idealist would want an egalitarian state, since, as aforesaid, everybody when seen for who they really are behind fanciful curtains, are the same. The realist may acknowledge that that would be nice, but the realist would also remark that this is not possible since greed’s green grip reaches deep into our minds and sways everything. This mercantile and materialist world that has spawned from greed has grown too great. The realist would know this. The realist would know that the fundamental of life are not based on flesh and bone any longer. That it has grown so big, that it simply cannot be removed.

That is the first point.

The second goes further into the subjects. As aforesaid, economics and philosophy are an understanding of the world, but as once again aforesaid, these worlds are different aspects of the same thing. Yet what do these subjects speak of? In philosophy, the person plays a huge part. No matter how grand a thought a person can come up with, we, as humans, are still bound and are thoughts can only reach a certain dimensionality. There maybe some things that our minds cannot perceive, and that limitation is also covered in philosophy. On the other hand, in economics, specifically in more elementary economics concerning elementary graphs, the human, the consumer, is nothing but a number on a line. Does that perhaps say something about the two subjects? Perhaps, perhaps not. Even in macroeconomics, where the human may have more precedence as a human and not a resource, since governments always try to benefit the people of their country, there are still concepts like aggregate demand where the humans are collectively considered a resource. On the other hand, humans are completely considered and are the main object in developmental economics, however, that is not being considered. Regardless, the very presence of the field degrades this argument. And, back to philosophy, the nature of the argument for graphs and economics applies here too, for didn’t Spinoza and Wittgenstein revolutionise the way we think about the most fundamental things of existence by using a number of definitions and axioms? Yes, they did.

One can go and on arguing back and forth, working a circuitous road into a very tired intellect, but eventually it bears no fruit. This essay, that may have started as a more organised and coherent piece but it has ended up being a jumble of thoughts. But why be afraid of such an outcome? Thinking does not guarantee success in arriving at one solid conclusion. No, many buildings of long-drawn out thoughts must crumble before that. And so, I found the process of ideating and writing this essay very interesting and valuable and can only hope that the reader whose eyes are meeting my words right now has also found something of value in it.

Image Credit: https://theconversation.com/what-if-the-world-was-one-country-a-psychologist-on-why-we-need-to-think-beyond-borders-152135