Economic Musings

  • Economics seems to be reduced to subjectivism. Recently I read in a textbook that economics is the theory of choice. This means that economics is merely a branch of psychology and especially that branch that deals with wish fulfillment.This is purported an advance in economics.
  • This becomes apparent when we consider the way things are talked about in economics. The required return on an investment is what the investor demands for taking some risk. As a sales pitch and a matter of rhetoric, sure. As a matter of objective fact, this is disconnected from reality. An investor implicitly demands a greater return from a riskier investment, precisely because a riskier investment is for that reason defective in such a way that it may fail. In order for defective capital to be worth as much as less defective capital (there is no such thing as risk-free in this world), it much be able to produce more.
  • Economics and politics are separable in thought but not in reality. Every economy is embedded and operates within a political framework. Economics presuppose some political order. Indeed, an economy is a subordinate political order. A political order itself presupposes an economic order for its functioning. As Aristotle discusses there is a distinction between a household management and wealth getting but they are closely related.
  • The characteristics associated with capitalism are a mix of economic, ethical and political stances. Voluntary exchanges, private property, wage labor, etc.
  • Aristotle includes friendship in his Nichomachean Ethics. Aristotelian ethics is not virtue ethics, but has a virtue theory. Happiness is not possible without friendship and friendship is political.
  • Aristotle criticizes retail sales as having no end. Profit it sought endlessly and this seems to be the case in capitalism. Profit brought into order with right living seems possible and this gives a concrete and natural end to retail sales. The retail is only an intermediary and secondary to the ultimate end of the good life. Agricultural life is an end in itself in that it produces what is needed. Retail sale seeks profit which in itself has no end, but need be brought in order by reason to obtain what is needed for the good life.
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