A great video to kick off your morning, refuel your afternoon or close your evening curtain. It showcases the link that connects Economics to other disciplines like Psychology by relating the Maslow's hierarchy of needs (proposed by Abraham Maslow in his paper "A Theory of Human Motivation" in Psychological Review journal) to the direction of growth of Capitalism.
Maslow proposed the idea that there is order to human needs and wants, starting with:
1. something as simple but crucial as basic needs (food, water, shelter, air...) that allow us to function,
2. to safety needs,
3. to the need to be loved and included,
4. to the need of feeling respected,
5. and last but not least, the need to realize one's aspiration and unlock one's true potential (the ideal and ultimate goal of life).
Economic development through whatever means (but mostly the prevailing capitalism), likewise, seeks to achi...
A couple of weeks ago, on the 28th of July, I was fortunate enough to attend a seminar conducted by Prof. Richard B. Freeman, one of the leading labour economists from Harvard University, on the topic of "How to solve inequality problem that is plaguing capitalsm?".
Prof. Richard B. Freeman on the left. Sorry, old phone's camera is not the greatest.
Prof. Richard B. Freeman (In case you want to know what he looks like). That hat though...
I find it to be quite an intriguing topic, given inequality itself is regarded an inherent nature of capitalism. In other words, inequality is, I dare say, an inevitable consequence of (pure) capitalism. Why?
1. Capitalism, its components, and inequality as a universal concern
Because capitalism, by definition, comprises:
- Private ownership of capital and produced goods and services,
Have you ever wondered how eggs end up in your fridge? It is not the conscious attempt of the chickens, nor is it the intention of the poultry farmers to ensure that the world is not egg-less. The farmers work to earn profit, and you buy the eggs to satisfy your own demand. You do not know the farmers, the farmers do not know you. The only force that connects you to the farmers is the invisible force of the free market.
This is the idea behind the INVISIBLE HAND, an econ term first introduced by the father of economics, Adam Smith. It is the very idea that if everyone is left to pursue their own self-interest (i.e. compete in a free market), the invisible free market force (aka, the invisible hand) will work its magic and bring the economy to equilibrium, where social benefits are attained without people actively and deliberately trying to achieve them.
My apology. As stated above, I noticed some mistakes. Well, not mistakes in a strict sense, but more like something that can potentially cause confusion. I have just realized that I really need to insert this paragraph somewhere in the text, and no where can I fit it in better than at the beginning of the article.So let me clarify one thing. I want to make it clear to all of you of there. Long story short, capitalism is about private ownership. Free market is about the freedom in exchanging of goods and services. Simply speaking, capitali...