COOL HEADS AT THE SERVICE
OF WARM HEARTS
Economics has, over the last century, grown from a tiny acorn into a mighty oak. Under its spreading branches we find explanations of the gains from international trade, advice on how to reduce unemployment and inflation, formulas for investing your retirement funds, and even proposals for selling the rights to pollute. Throughout the world, economists
are laboring to collect data and improve our understanding of economic trends.
You might well ask, What is the purpose of this army of economists measuring, analyzing. and calculating? The ultimate goal of economic science is to improve the Irving conditions of people in their everyday Jives. Increasing the gross domestic product is not just a numbers game. Higher incomes mean good food. warm houses, and hot water. They mean safe drinking water and inoculations against the perennial plagues of humanity.
Higher incomes mean even more. They allow governments to build schools so that young people can learn to read and develop the skills necessary to invent new technologies like artificial intelligence. As incomes rise further, nations can afford deep scientific inquiries into biology and discover still more vaccines against still more diseases, With the resources freed up by economic growth, talented artists have the opportunist to write poetry and compos music, while others have the leisure lime 10 read, 10 listen, and to perform, Although there is no single pattern of economic e Maintop, and the evolution of culture will dim, r around the world, freedom from hunger, disease, and the elements i~ a universal human aspiration.
But centuries of human history also show that warm hearts alone will not feed the hungry or heal the sick. A free and efficient market will not necessarily produce a distribution of income that is soda~y acceptable. Determining the best route to economic progress or an equitable distribution ~f s~iet)”‘s ~Pullout. requires cool heads, ones that objectively weigh the costs and benefits of different approaches, trying as hard as humanly possible to,keep tpe an~dialysis free from the taint of wishful thinking. Sometimes, economic progress will require shutting down an out- – domed factory. Sometimes, as when the formerly social~ t countries adopted market principles, things get worse before they get better. Choices are par~circularly difficult in the field of health care, where limited resources literally involve life and death.
You may ha~e heard the saying, “From each according to his ability, to each according to his need.” Governments have learned that no society can long operate solely on this Utopian principle. To maintain a healthy economy, governments must preserve incentives for people to work and to save. Societies can support the unemployed for a while, but when unemployment insurance covers too much for too long, people come to depend upon the government and stop looking for work. If they begin to believe that the government owes them a living, this may dull the sharp edge of enterprise. Just because government programs derive from lofty purposes does not mean that they should be pursued without care
Society must find the right balance between the discipline of the market and the compassion of government social programs. By using cool heads to inform our warm hearts, economic science can do its part in ensuring a prosperous and just society.
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