The Murphmeister has done it again. Entirely glorious.
A huge great long post in which, well, in which…..
It is my belief that the goal of human life is to achieve one’s potential: to seek to explore the possibilities available to you to the full within the constraints placed upon you. So, logically, you would want your area of achievement to approach the outer circle of your limit of possibility.
The clear implication of the model being proposed here is that the green area in the diagram is better for the person who enjoys it than the red area: it is not just that they appear to have more, they have come closer to fulfilling their potential for achievement, and that is their aim.
That though begs the question, is there a limit to possibility? And does that mean achievement is constrained? It is this question that fundamentally changes the approach used here from that offered by conventional economics at this time. Conventional thinking is that the individual should think their consumption unconstrained, even though the reality is otherwise. In the economics proposed here is the individual is recognised to be constrained they then recognise a different goal – which is to work to achieve within the constraint. And, of course, the answer is that the individual is constrained, and there is a limit to possibility that they must accept.
To some degree this is internally imposed by our finite nature.
It is also externally imposed. The simple reality is that we cannot consume without limit. The world is finite. Like us it has a beginning and an end. Of course, like us it also has a capacity to regenerate itself. But ultimately the laws of entropy apply: there is a limit to what is possible.
Yup, working from first principles he\’s just discovered that we do in fact face a world of scarce resources. And that within those constraints we should struggle as best we might to gain the goals that we ourselves desire. You know, material comfort certainly, but also social contact, possibly a meaning to life, whatever floats your boat really. Possibly even greater social and economic equality if that\’s the sort of thing that turns you on.
He really should have paid more attention to those economics lectures at the University of Southampton, shouldn\’t he? For we\’ve already got a name for that second concept: utility. And the entire subject is really, at bottom, devoted to exploring how people struggle to maximise utility within the constraints imposed by scarce resources and the technology available to use them.
One of the points of university, indeed of any education system, is to inform you as to what others have found out before you. So that you don\’t have to go around reinventing the wheel all the time.