The Purpose of Economics

The purpose of economics is, according to Gary Becker (a Chicago economist), ‘to understand and alleviate poverty.’ Levitt, at Freakonomics, writes

What’s surprising about Becker’s comment — and I believe he is telling the truth and not just being politically correct when he says helping the poor is the point of economics, because he never worries about political correctness — is that he is a staunch Republican and a firm believer in markets. There is no reason why that belief in markets can’t go hand in hand with really wanting to help the poor, it just usually doesn’t.

In a market economy, there are inevitably winners and losers. So most folks who worry about the poor are turned off by markets, believing that some other system could do a better job for the worst off. Becker, however, would argue that markets, especially when combined with access to good education, are the best shot the poor have.

In another Freakonomics post, Dubner discusses Becker’s idea of ‘the economic approach,’ where he somewhat surprisingly concludes that almost all deaths are suicides!

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