Introduction to Economic Theory 197
One of the questions of primary importance deals with the
nature of man. Is man’s nature competitive or cooperative, or is
he conditioned to be one or the other? The implications that
follow from whatever postulates are accepted are important to
economic theory. What one thinks about the nature of man has
a direct relationship to the basic economic question of what to
produce, how to produce, and for whom to produce, and eco
nomic philosophers have constructed elaborate systems based
on their premises about the nature of man. We shall undertake to
study and evaluate those systems.
There are six major goals that most people agree are valid
concerns for any economic system. Economic theory generally
deals with how we might best accomplish these goals. The
identified goals are:
- Economic growth— Each community seeks economic growth,
to increase the production of goods for the improvement of
individual and social well-being. There are, however, ques
tions that are posed by the subject of economic growth. At
what cost to the environment, individuals, or future growth
may economic growth be considered good? When, and under
what circumstances, might economic growth be considered
undesirable? How do we make those determinations?
- Full employment— Every community seeks full employment
for its members, to provide jobs for all those able, eligible,
and seeking to work. How to achieve that goal is the question.
Does the private sector create jobs? Does the state have the
right to force people to work? How is full employment best
achieved, by the state or by private enterprise? If full employ
ment is attained, who deals with the resulting threat of
inflation?
- Price stability— Wild fluctuations of price are universally
acknowledged to be unhealthy for any community. The
human need for some kind of predictability is not only a
political postulate, but also an economic one. Should the state
set prices? Is the desired stability a short or a long term goal?
Does the supply and demand cycle require some instability?
- Economic freedom— Choice is an essential aspect of the
human condition. Most people would agree that to maximize
economic choice is a desirable end. But, at what cost? Does
