Capullizacion

THE ECONOMIC WAY OF LOOKING AT LIFE*
Nobel Lecture, December 9, 1992

G A R Y S. B E C K E R Department of Economics, University of Chicago, Chicago, IL. 60637, USA

1. The Economic Approach My research uses the economic approach to analyze social issues that range beyond those usually considered by economists. This lecture will describe the approach, and illustrate it with examples drawnfrom past and current work. Unlike Marxian analysis, the economic approach I refer to does not assume that individuals are motivated solely by selfishness or gain. It is a method of analysis, not an assumption about particular motivations. Along with others, I have tried to pry economists away from narrow assumptions about self interest. Behavior is driven by a much richer set of values andpreferences. The analysis assumes that individuals maximize welfare as they conceive it, whether they be selfish, altruistic, loyal, spiteful, or masochistic. Their behavior is forward-looking, and it is also consistent over time. In particular, they try as best they can to anticipate the uncertain consequences of their actions. Forward-looking behavior, however, may still be rooted in the past, forthe past can exert a long shadow on attitudes and values. Actions are constrained by income, time, imperfect memory and calculating capacities, and other limited resources, and also by the available opportunities in the economy and elsewhere. These opportunities are largely determined by the private and collective actions of other individuals and organizations. Different constraints are decisivefor different situations, but the most fundamental constraint is limited time. Economic and medical progress have greatly increased length of life, but not the physical flow of time itself, which always restricts everyone to twenty-four hours per day. So while goods and services have expended enormously in rich countries, the total time available to consume has not. Thus, wants remain unsatisfiedin rich countries as well as in poor ones.
* This lecture is dedicated to the memory of George J. Stigler, who died almost exactly one year ago. Nobel Laureate, outstanding economist, very close friend and mentor, he would be as happy as I am had he lived to see me deliver the 1992 Nobel Lecture in Economics.

For while the growing abundance of goods may reduce the value of additional goods,time becomes more valuable as goods become more abundant. Utility maximization is of no relevance in a Utopia where everyone’s needs are fully satisfied, but the constant flow of time makes such a Utopia impossible. These are some of the issues analyzed in Becker [1965], and Linder [1970]. The following sections illustrate the economic approach with four very different subjects. To understanddiscrimination against minorities, it is necessary to widen preferences to accommodate prejudice and hatred of particular groups. The economic analysis of crime incorporates into rational behavior illegal and other antisocial actions. The human capital approach considers how the productivity of people in market and non-market situations is changed by investments in education, skills, and knowledge.The economic approach to the family interprets marriage, divorce, fertility, and relations among family members through the lens of utility-maximizing forward-looking behavior. 2. Discrimination Against Minorities Discrimination against outsiders has always existed, but with the exception of a few discussions of the employment of women (see Edgeworth [1922], and Faucett [1918]), economists wrotelittle on this subject before the 1950s. I began to worry about racial, religious, and gender discrimination while a graduate student, and used the concept of discrimination coefficients to organize my approach to prejudice and hostility to members of particular groups. Instead of making the common assumptions that employers only consider the productivity of employees, that workers ignore the...