What economics gets wrong about humanity | Adnan Muminovic | TEDxSarajevo

Summary

In this insightful talk, the speaker critiques mainstream economics for its fixation on pricing, arguing that it undermines the intrinsic value of essential elements in life, such as nature, love, and social ties. The speaker illustrates how this obsession leads to detrimental consequences, particularly in environmental decision-making, where the benefits of green spaces are often undervalued compared to easily quantifiable economic gains. Emphasizing the importance of recognizing the difference between price and value, the speaker calls for a shift in perspective, urging society to appreciate nature's worth and reconsider how we measure its contributions.

Takeaways

• 😀 Economics is unique among social sciences as it is awarded a Nobel Prize, though it was not included in Alfred Nobel's original will.
• 😀 The obsession with GDP and the belief in fully rational, selfish behavior in economics are overly simplistic and flawed views.
• 😀 The primary focus on measuring prices often leads to neglecting the intrinsic value of non-quantifiable aspects of life.
• 😀 Important concepts like love, compassion, freedom, and dignity cannot be easily quantified, yet they hold immense significance.
• 😀 A study in 2008 attempted to quantify the monetary value of social relationships, illustrating the absurdity of treating relationships as commodities.
• 😀 Environmental discussions often favor economic calculations over the intrinsic value of nature, leading to detrimental consequences.
• 😀 Quantifying the benefits of natural spaces is challenging, making it difficult to compete with easily measurable economic benefits.
• 😀 Introducing prices to certain social goods, like blood donations, can undermine their intrinsic value and quality.
• 😀 Penalizing behaviors, such as late pickups in daycare centers, can lead to unintended consequences by changing social norms.
• 😀 Recognizing the distinction between price and value is crucial for making informed decisions about our environment and social systems.

Q & A

What is the main argument presented about economics in the video?

The speaker argues that mainstream economics has a significant shortcoming in its obsession with measuring things primarily through prices, often neglecting the true value of important aspects of life such as nature, relationships, and well-being.

How does the speaker differentiate between 'price' and 'value'?

The speaker explains that 'price' refers to the monetary cost of something, while 'value' encompasses the broader significance and benefits that may not be quantifiable in financial terms, such as love, freedom, and nature.

What example does the speaker provide to illustrate the failure to measure value?

The speaker references a 2008 paper that attempted to put a monetary value on social relationships, calculating them at about £85,000 per year, highlighting the absurdity of quantifying personal connections.

What consequences does the speaker associate with the obsession for quantifying everything?

The speaker argues that this obsession leads to the treatment of significant aspects of life as worthless when they cannot be quantified, which is particularly detrimental to our relationship with nature.

In what way does the speaker suggest that the economics of nature can be harmful?

The speaker emphasizes that attempts to assign prices to natural resources can diminish their intrinsic value and lead to detrimental decision-making that disregards the complex interdependencies of ecosystems.

What is one of the key examples used to demonstrate the negative effects of monetizing important social actions?

The speaker cites the example of blood donations, explaining that when monetary incentives are introduced, the quality of blood decreases, and the overall number of donations does not increase, as it undermines the intrinsic motivation to donate.

What is the speaker's perspective on using economic models to address environmental issues?

The speaker cautions against solely relying on economic models that attempt to price nature, suggesting that this can distort our understanding and appreciation of the environment, as it shifts the focus from moral obligations to economic calculations.

What alternative approach does the speaker propose for valuing nature?

The speaker advocates for spending more time in nature to appreciate its value and suggests that the burden of proof should shift to economists, requiring them to demonstrate the environmental impact of projects rather than forcing environmentalists to quantify nature's worth.

How does the speaker view the historical context of economics in relation to social systems?

The speaker argues that economics is not an external or alien science; rather, it was created by society and can be reshaped by societal values and needs, regardless of whether the context is neoliberalism or socialism.

What existential concern does the speaker raise towards the end of the talk?

The speaker expresses urgency regarding the threat humanity poses to itself and other species, emphasizing that while the planet may survive human actions, the time to address these issues is running out.