Economics- The Ultimate Philosophy.

Sharing an article I wrote for my college magazine three years back. This article surmises my future research plans as well.

Life has strange plans for all. It’s a force which can only be controlled so much, making it impossible to plan it out perfectly, and even if it indeed were possible, it would be an extremely tedious and fruitless endeavour. A river runs its own course, you can change the direction of flow every now and then, but ultimately it creates its own path.

Is there anything such as fate? Almost all of us end up doing something we never planned. All humans possess free will.  But isn’t free will just an illusion? This can be explained by economics. We live in a world of constraints. These constraints are not just physical and social but mental as well. Economics 101 taught us that resources are scarce and hence we have to choose. The problem with free will is choice. Choosing is not easy. Combine that with the constraints of resources and abilities and the mess of it all pushes you into unexplored territories. Very simply, we attribute these factors to something mystical, what we call destiny, but it’s ultimately basic economics which explicitly explains it. But is Economics such a perfect tool? Obviously not. It is a dismal science. Human actions are way too complex to comprehend and there can never be enough variables in a model to perfectly replicate a model of consistent human decisions over time. This is what separates Economics from the pure sciences and makes it a Social Science.

I was the epitome of an above average, Indian school student, carrying his family dreams as an illusion of his own. Destined to be the nth engineer, it was a month from entrances I realized that engineering was not for me. I was fortunate that I realized early enough. I learned from my mistake but only partially. I still sought Economics as a stepping stone to the holy grail of White Collar jobs in India, the coveted MBA.

The focus of my article is to say that as from my example, choosing economics and not engineering or MBA was neither free will nor destiny. It was my love for the subject, which attempts to explain human behaviour, and terribly fails at it. How can it, when we fail to explain our own behaviour?

We learn from our mistakes and try again, experienced and improved. Economics replicates this in an unusual way. Like other fields, it learns from its mistakes and gets updated, explaining human behaviour a little better, but simultaneously unravelling  a more complex decision making paradigm we humans have,  making estimation of human behaviour even more random than before.  The fact that such paradoxical forces coexist within a single field is by far more human than in any other subject that I’ve studied.

This is cemented by another example. Central to human philosophy are the notions of existence, reality and perception. We all perceive the world differently, usually in contradiction to the beliefs of other people. A fundamental example of this is the concept of religion. Though every religion shares the same goal, each provides a different pathway, usually in contrast to the pathway suggested by another. Is Economics too different? Different schools of thought within economics provide principles on how to reach the same goal (Economic Development instead of being closer to God in this aspect) usually in complete contrast to the other schools of thought.

Karl Marx bellowed that Religion is the opium of the masses, But isn’t it ironic that after his death he himself would be a prophet of a new religion, communism, which would ultimately shape up more than half a century in the near future?. His theory was based upon contradictions, yet it proves his followers made his teachings contradictory in its self.

In conclusion, I affirm that to understand human decision making, it takes a tool so ridiculous that it fails in every attempt to do as such. A tool riddled with contradictions. A tool, which as it develops makes things more complex than simple. A tool that is basically human in nature. What can be more beautiful than that? A tool which explains everything and nothing and creates even more problems than it solves. Economics is not a religion, it is the ultimate philosophy.