‘The Economic Way of Looking at Life’ is a Nobel lecture delivered by Gary Becker on 9 December 1992. He discusses social issues, the reasons behind them, and their consequences from an economic point of view. This kind of vision enables an individual to understand the motives and the rationale of choices among numerous other aspects influencing the economy-based approach to viewing life.

The main issues covered in the lecture are crime, human capital, and family, as Becker has worked on them for decades (Becker 41). As the lecture is dedicated to the economic approach as a method of analysis, the first issue is the assumption that all individuals are rational in their choices, motivated only by selfishness or gain. The marxian analysis is based on this hypothesis. However, many more factors other than the two mentioned above define the people’s conduct.

Becker also analyzes discrimination through an economic perspective. To define the phenomenon in terms of economics and consider its effect, which is constantly present, the author introduces the discrimination coefficients, comprising it in many forms. It can be gender, racial, and religious discrimination. This way, the analysis makes possible not only the qualitative but also a quantitative determination of discrimination and allows investigating its influence on the behavior of consumers in terms of economic choices.

Crime also plays an important role in Becker’s study. When he started paying attention to this social issue, it was considered that motives that criminals have do differ greatly from the rationale of people in general. However, on a simple example, such as getting a ticket for parking in a wrong place, Becker shows that they do not vary but the means do.

The issue of misunderstanding the term ‘human capital’ also occupies a noticeable place in the studies that Becker announced in his lecture. People used to associate the human capital with the practice of seeing people as machines. However, this is an issue indeed, as the lack of understanding is what constraints people from increasing and developing the human capital, thus boosting its effectiveness.

Family and issues it concerns take a massive part in the lecture. They include rational consumer behavior, human capital investments, the time resource, and discrimination of women. The family is an old institution, which has a wide range of features that differ greatly from one culture or society to another. However, the question of the family was not analyzed widely by economists until lately.

As aforementioned, to address the points from the research, Becker uses the economic approach. The name of the approach is too wide to be specific. Its core principle, unlike the Marxian analysis, which uses mostly gain and self-interest, is handling social issues through the prism of multiple factors. The economic approach comprises such factors as the features of people’s behavior (loyalty, masochism, selfishness, altruism, etc.). Consequently, the author emphasizes that people strive for the maximal welfare but their actions to gain it differ greatly. Individuals try to act rationally according to their wants. However, their actions are limited by time (there are only 24 hours per day for any individual), opportunities (changes in the economy are at times unpredictable), and actions of other individuals. Thus, the economic approach is much wider than the usual Marxian one. It allows considering a greater range of factors affecting an individual’s behavior. The very same approach – the widening of assumptions – enables the economists to understand better and even to predict the economic behavior of social minorities.

The lecture also includes the main findings of Becker’s studies. As a consequence of utilizing the basic principles of economic approach, the wants of individuals can remain unsatisfied both in rich and poor societies. Such a conclusion derives from the scantiness of the most fundamental source, which is the same in any society and country – time. While the quantity of goods increases and the amount of time remains the same, the goods become excess.

Becker also discusses the role of prejudice in discrimination. The analysis has shown that the environment might deal differently with the given amount of prejudice. In some cases, it is softened. However, sometimes it only becomes harsher.

When talking about crime, Becker dwells on the motives in the first place, claiming that the driving forces of criminals are rational as well. However, the majority of people are afraid of punishment and breaking morale. The second factor is the economic and social environment which instigates a particular behavioral pattern as well.

Crime might also be regarded as a way of goods redistribution. However, Becker states that it does not produce any additional value. Therefore, criminals spend time, efforts, and financial resources on the forcible redistribution of goods which has no additional benefits for the economy. The most effective way to reinforce the damage that crime does to the society is to apply fines. Although the society still suffers greatly from crime, at least the economy obtains contribution.

From the point of view of economic approach, the human capital is very important. Through the lens of it is possible to explain many regular occurrences in the labor market and in the economy in general. Moreover, when people consider the investments in human capital to be convenient, it allows determining the economic effect of such investments without the consideration of an I.Q. and special talents. The studies of Becker also illustrate that employees with a high level of skills in a narrow area are not likely to quit or lose their job, as they fill a certain niche in the labor market.

When it comes to family, Becker states that people maximize their utility even during some relationships, e.g. marriage or divorce. However, it is only a basic assumption for the next stage of analysis and can be rebutted. It has been shown that the greater possibility of divorce exists among poor families. This effect is explained by such socioeconomic factors as uncertainty, scrutiny, and need among others. For the next stage of analysis, Becker takes the labor division, emphasizing how small differences in discrimination (cultural interpretation) or biology (biological interpretation) influence it.

The motives of actions that concern family are merely and reasonably different from self-interest. Love, altruism, and gratitude are the common motives for the family relationships. Looking at the institute of the family through the lens of the human capital investment, it is the strongest reinforcement. People who invest in themselves and then their offsprings as in the human capital are most likely to be brought up by parents who had also invested in them. However, for such parents, these are the investments in full meaning, as they bring a much bigger return than money savings or capital. Consequently, in this case, society benefits twice as much: from children with high human capital and parents who are supported by them. Considering the human capital investment, sometimes family relations are also motivated by the hopes that parents have for their elder-being, and act accordingly.

The significance of Becker’s studies cannot be overstated. The economic approach and findings obtained with it differ qualitatively from the results obtained from the classic Marxian analysis. These results are more comprehensive. Considering the discrimination, the author states that the discrimination in small amounts is quite effective for the economy due to the uneven distribution of skills and competition accompanying it. However, when the majority is a few times greater than the minority, it only harms the economy.

The importance of human capital emphasized by Becker is also immense. Previously, the human capital was largely ignored due to its ‘demeaning’ nature. However, multiple studies mentioned in Becker’s lecture, and the research of his own as well, have shown the effectiveness of investments in human capital, like those into education, healthcare, etc. It made the society change its opinion and start treating the human capital accordingly: not as if it assumed that people are machines but as a way of increasing the effectiveness of human interactions, which leads to positive changes in the economy, politics, and social sphere as a whole.

Although the lecture is quite comprehensive, it still leaves some questions open for the discussion and new studies. The question of discrimination by employees and customers, rather than employers, can be fully covered only in the long run. The rational choice model is also a very promising basis, as this model is grounded on the assumption of individuals being rational, that is common for every area of economic studies. However, there is a field for studying the motives behind the rational behavior of individuals that differ greatly, their means for making rational choices and resources that make it available to act according to their options are also different.

Overall, Gary Becker concerns many issues in his lecture. These are the discrimination, human capital, family, and problems of classical analysis. All of the questions, however, have common social roots and possess many connections between them. The economic approach allows detecting these connections and their nature, as well as the origin of many economic phenomena, due to its multifactor approach. Unlike the Marxian analysis, it does not focus solely on rational self-interest but pays attention to factors such as limited time, actions of other individuals, and opportunities created by the economy among others. The significant findings presented by Becker include the discrimination coefficient, which allows measuring discrimination in a certain way, crime motivation, explaining the small difference in usual and criminal motives, and the previously undiscovered ways in which crime harms the economy and society. These findings also include the importance of the human capital for the society and how is it connected with family relations. Besides, there is a mutual connection between family relations and the investments in human capital among the entities discovered by Becker.

Limited time offer!
Get 15%off
discount code: my15off
clock-2

Buy Synopsis Paper Writing Help from us and be sure that we will provide an outstanding piece of writing!