In many economics textbook, the opening statement is: We are only concerned with things that exist (positive study), but not thing that should be (normative study). In other words, economists confine themselves in understanding the fact that people are rational when they commit a crime (Becker, 1968) but not on whether crime is right or wrong. For example, with economics you can show that a poor person robs because his opportunity cost is low (no job, and no skill). But does it mean it is right for this person to rob? Economics falls silent on such questions.
Economics can show us how the healthcare reform is a deadlock because each party has their self-interests. But how to break this dead-lock? Economists show that a government consists of politicians who seek to maximize their personal interests, but how do we have a less corrupted government?
With economic theory, we understand perfectly why a white man prefers to live next to a white neighbor, but does that imply it is ok for him to drive out a neighbor of another race? After all, social reform is about taking a stand: what is acceptable behavior and what is not. It is about setting new law and new system such that the incentives for the old parties completely change. If we think racial integration is more important, we will force the school to open up their enrollment and gradually people will accept other races. If we think universal healthcare is more humane (and cost effective), we will move forward with such a system despite the pain of HMO companies and certain parties.
Economic study gives us perspective for people’s behavior within their current social structure, but it fails to answer how we should change that social structure. It may give us answers on how to promote economic growth, but not on how to share the fruits of growth. Equality, justice and humanity come from people’s demand. It is about changing our current social framework.
The demand for civil rights, for universal healthcare, and for voting rights of women, go beyond the realm of economics. While economics builds its foundation on the fact that people pursue their self-interest rationally, social reform builds its foundation on that fact that certain things are not justifiable with self-interest. Slave owners want slavery, but it is not justifiable. Men don’t want women to have equal rights, but that has to change. The change of a law or proposing a new law is promoted by one group of people over the objection of the other. The English never wanted to give up their control of India, but they are forced to. Such social change is beyond the realm of Economics. Instead they are better understood through the lens of political philosophy or legal philosophy.
