|
Economists like to think of human beings as free agents, with free wills. To economists, people are fully rational and capable of deciding things on their own. But that begs the question of what motivates people and, in turn, of what sorts of things people will choose to do given their free wills.
In a nutshell, economists assume that the basic motivation driving most people most of the time is a desire to be happy. This assumption implies that people make choices on the basis of whether or not those choices will make them as happy as they can be given their circumstances.
Using utility to measure happiness
If people make choices on the basis of which ones will bring them the most happiness, they need a way of comparing how much happiness each possible thing brings with it. Along these lines, economists assume that people get a sense of satisfaction or pleasure from the things life offers. Sunsets are nice. Eating ice cream is nice. Friendship is nice. And some people happen to like driving fast.
 | Economists suppose that you can compare all possible things that you may experience with a common measure of happiness or satisfaction that they call utility. Things you like a lot have high utility, while things that you like only a little have low or even negative utility. |
The concept of utility is very inclusive. For a hedonist, utility may be the physical pleasure gotten from experiencing various things. But for a morally conscientious person, utility may be something like a sense of moral satisfaction that he's doing the right thing in a given situation. The important thing for economists is that people are able to ascertain and compare the utilities of various possible activities. Utility acts as a common denominator that allows people to sensibly compare even radically different things.
Taking altruism and generosity into account
Economists take it as a given that people make their choices in life in order to maximize their personal happiness. This viewpoint immediately raises objections because people are often willing to endure great personal suffering in order to help others.
Yet, to an economist, you can view the desire to help others as being a personal preference. The mother who doesn't eat in order to give what little food she has to her infant may be pursuing a goal (helping her child) that maximizes the mother's own happiness. The same can be said about people who donate to charities. Most people consider such generosity "selfless," but it's also consistent with assuming that people do things to make themselves happy. If people give because doing so makes them feel good, their selfless action is motivated by selfish intention. Because economists see human motivation as selfish, economics is often accused of being immoral.
However, economics is concerned with how people achieve their goals, rather than with questioning the morality of those goals. For instance, some people like honey, but others do not. Economists make no distinction between these two groups regarding the rightness or wrongness of their preferences. Rather, what interests economists is how each group behaves given its preferences. Consequently, economics is amoral, rather than immoral.
Economists, however, are people, too, and they're very concerned with things like social justice, global warming, and poverty. They just tend to interpret the desire to pursue morality and equity as an individual goal that maximizes individual happiness, rather than as a group goal that should be pursued in order to achieve some sort of collective good.
Realizing that self-interest can promote the common good
Adam Smith, one of the fathers of modern economics, believed that if society was set up correctly, people chasing after their individual happiness would provide for other people's happiness as well. As he famously pointed out in An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776, "It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest."
Put differently, the butcher, the brewer, and the baker don't make stuff for you because they like you, but because they want your money. Yet because they want your money, they end up producing for you everything that you need to have a nice meal. When you trade them your money for their goods, everyone is happier. You think that not having to prepare all that food is worth more to you than keeping your money. And they think that getting your money is worth more to them than the toil involved in preparing all that food.
Adam Smith expanded on this notion by saying that a person pursing his own selfish interests may be "led by an invisible hand to promote an end which was no part of his intention."Because economists recognize this "invisible hand," they're less concerned with intent than with outcome, and less concerned with what makes people happy than with how they pursue the things that make them happy.
| 
