Week 6 Wall
Is economic behaviour universal? Do all people pursue their material self-interest all the time? Put another way, can you think of situations where a “backward sloping supply curve” would explain your behaviour?
Is economic behaviour universal? Do all people pursue their material self-interest all the time? Put another way, can you think of situations where a “backward sloping supply curve” would explain your behaviour?
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angieL, 
cprimus, and 7 others are discussing.
enorthwood 4:53 pm on October 9, 2013 Permalink | Log in to Reply
In light of what’s been discussed this week, I think it certainly can be universal. However, I’d argue that not every place in the world is going through the same economic situation at the same time perhaps. I think that trading amongst one another is commonly acceptable as universal. This is applicable to the women known as the Metis from our lecture on Monday. They understood economics through trading and establishing trade relationships with the HBC and NWC. I think the desire to trade to gain goods you normally can’t get, and is certainly universal, however not everyone perhaps has the same timeline for it’s universality. I don’t think people do pursue their self-interest materially at the time, realistically there is a lot of organizations and people that do things despite material gain or not. Arguably, the Red Cross Organization is certainly extraordinarily self-less and is an humanitarian organization. Many people follow these organizations and put time in, donate money, and also dedicate themselves these causes. It would be hard to say that all people pursue their material self-interest all the time. None the less, they’re certainly people who do pursue their self-interest through tyranny as leaders. I mean, looking at Brazil there is a huge divide between rich and poor. Through my own behavior I can relate to my job over the summer. While I was saving for school during summer months, I worked long hours sometimes 13+ hour days at the start of my job as a waitress. I was then after a month moved to bartender, and after a few more weeks promoted to shift leader. With my promotion to shift leader I could take on less hours because I was being paid more, therefore my self-interest to obtain more money went down and I could enjoy more resting and down time. However, I decided to continue to work long hour days still because extra money was still extra money, and I could buy more things for myself. That’s a situation where I myself have let my material-self interest guide me, however I would argue that when it comes to economic gain, that was my personal interest. Nonetheless, someone else might have enjoyed more leisure time, that just wasn’t in my interest.
Tina Loo 11:47 am on October 13, 2013 Permalink | Log in to Reply
Emilee, I think you do bring up a good point: how people behave (economically or otherwise) depends on the context; i.e. they don’t behave the same way all the time. Instead, circumstances shape their behaviour. Also I think you’re right to point out that if we really did pursue our self-interest all the time there wouldn’t be any altruism. I suppose you could argue people donate to or work for the Red Cross because they get something out of it materially, but that might be too cynical… However, I did wonder about one of your comments: is the desire to get things you can’t usually get universal? Don’t those goods have to be seen as valuable in your society first?
kenthen 10:29 am on October 10, 2013 Permalink | Log in to Reply
Economic behavior is universal. I think everyone everywhere trades some form of goods for other goods in some form of exchange. Now saying this I think it’s relative and relevant to the existence that the people live within that defines to what extent they do trade or even how much they trade. Which leads to the next question: do people pursue their material interest all the time? I will say no only because human nature is to socialize and to find leisure and comfort of others to surround us. We have the ability to laugh, to smile and share and wouldn’t this be a shame to waste on accumulating nice couches, vehicles and bank rolls all the time. I think back to the fur traders and although I’m pretty sure not many in this day and age would have the strength or capacity to lead and live within that existence, especially the ‘voyageurs” but I also believe that they took time out of their lives to just be still. Also look at human nature we invent, develop and re-invent items to make our lives easier to accomplish tasks faster and with less thought, saying that its also human nature to use that time to accomplish other tasks. So while we have tried to make life easier we still remain busy but we also seek out leisure when we can for not only socializing or rest but our health as well. Now in extreme cases I think that there probably is a scrooge mcduck out there who pursues their material self at all times and that there is someone who lives outside of our civilization and society who might have no one to trade goods with and finds way to be autonomous of any form of economics, those are extreme. As for backward sloping curve I think back to my days as a conductor for CP Rail where as a junior conductor you receive only 85% of your wage. As you finish out your junior period you eventually move up in 5% increments till your at 100%. So when i first started I worked as hard as i could and got in as many trips to make up for that 15% loss that i was incurring. As I moved up and eventually made my way to 100% I relaxed a little and stopped trying to jump ahead. So less money meant i worked more and more money eventually lead to me trying to work less for more leisure.
Tina Loo 11:50 am on October 13, 2013 Permalink | Log in to Reply
Kenthen, I like your example of working for CPR. I wondered if you thought what was considered in one’s self-interest differed across cultures? In other words, we might all pursue our material self-interest, but what was considered self-interested behaviour is different among different peoples, and in different times and places.
millyzhu 7:29 pm on October 10, 2013 Permalink | Log in to Reply
I believe that economic behaviour is universal because everybody wants to climb higher on any type of ladder, be it social, political, or economic ladder. Even from before when there was no exchange of money, people still managed to establish a trade system, valuing which one equaled to what and thus creating a measuring scale of some sort. I also believe that people do pursue their material self-interest all the time, be it consciously (usually under a competitive setting) or unconsciously. For example, during the fur trade with the focused interaction between indigenous women and French settlers or fur traders, it led to the creation of a new group of people known as the Métis. Despite the original purpose for interacting with indigenous women and French men, and vice versa, which was to gain more access to goods, status, or better lifestyle, after giving birth to children, the French men wanted to send their children to Europe to “better educate” them. This was the French fathers’ way of unconsciously pursuing their own material self-interest in hopes that with this investment, the return will be relatively higher than compared to if the children stayed in young Canada. A situation where a backward sloping supply curve occurred in my life would be the transition from volunteering to being employed at a certain school district’s international summer program. When I was volunteering, I tried very hard for two years because I wanted the employers to have a good impression of me for when I applied for work. My material self-interest was already showing at this time where I did as much volunteering as I could for the two summers, which usually ended up being five days a week for two months. However, this paid off as my experience led me to being employed. After getting hired, I was scheduled for only working for three weeks during the entire summer. Despite that, compared to my volunteering days, being employed and getting paid was easier work as I had more time to do more significant things, while passing the smaller tasks to the volunteers. Nevertheless, my economic behaviour kicked in and I wanted more hours in order to accumulate and satisfy my own material self-interest. Therefore, when there are advantages and benefits to be gained, I believe that anyone with a material self-interest would unleash their economic behaviour.
Tina Loo 11:52 am on October 13, 2013 Permalink | Log in to Reply
Good example Milly. I wondered how you’d explain altruism if everyone really did pursue their material self-interest all the time?
mosachoff 12:38 pm on October 11, 2013 Permalink | Log in to Reply
I think that economic behavior is for the most part universal. At the basis of every trade, there is a buyer who wants something and a seller who is selling something. The same motivations for trading today have existed as part of human nature for thousands of years, where the individual is looking for a result that they desire. This can take the form of currency, time, or altruistic satisfaction, knowing that they have made an improvement in the lives of someone else. From our readings about the fur trade, it is clear that the natives trading with the Europeans were adept traders and good judges of the quality of goods they were offered. That being said, the Indians did not have the same cultural values where accumulation of wealth was analogous to a rise in status. This misconception led historians to believe that the natives were cheated and really did not play an integral role in the fur trade. In fact, natives were vital to the fur trade and although their ideas of wealth differed from that of Europeans, they were still astute traders. The natives pursued material self-interest in their trading, just not excessively. In every trade they made, they acquired something they needed or wanted. Even later when Europeans traded fur for alcohol, it was still the native’s self-interest that drove the trade. At times, my own behavior is best described using the backward sloping supply curve. I have declined to work in situations because the pay I received already was satisfactory to my needs and working more was considered less valuable than my leisure time, after a point. This summer, I worked as a lifeguard on the beaches of Vancouver. The pay was pretty good and because of the fantastic weather we received in July, I often opted to spend time hanging out with friends, despite the demand for my labor. In this case, my decision was not to pursue a material self-interest but instead gain free time. Though I did not receive pay I found the time off was equivalent in value. Both my behavior and the Indians trading in the fur trade made decisions that didn’t necessarily yield material wealth, we both gained utility in the form of time in my case and necessary supplies in the case of the Indians.
Tina Loo 11:54 am on October 13, 2013 Permalink | Log in to Reply
Good example Michael. So does that mean you wanted a certain lifestyle more than you wanted the money? If that’s the case, then is pursuing your material/economic self interest universal?
nkular93 12:49 pm on October 11, 2013 Permalink | Log in to Reply
I personally do believe that economic behaviour is universal in that ultimately each and every individual wants to advance their economic interests and make money or any sort of profit for themselves. Individuals are overall self interested and will look out for things that will improve their quality of life. It doesn’t matter where you are from or what group you being to or even how much you know about the world or how educated you are as every individual is going to look at what is going to be beneficial to them. Its natural to look out for yourself. In light of the material we have been looking at in class, aboriginal people who were involved in the fur trade were very much sophisticated traders who knew how the fur trade market functioned and what was beneficial and profitable to them. These people were also self interested and wanted to profit from the fur trade just as much as the Europeans.
I don’t believe that people pursue material self interests all the time as a persons life cannot always just revolve around one aspect. There are so many things and situations that life throws at people and I don’t believe that it is possible to only think about your own self interests ALL the time. A lot people can choose to let it define their goals however if they have the drive to be successful in terms of being wealthy.
A situation in which a backwards slope supply curve could describe my behaviour is when I became a tutor and started working for a tutoring centre. In the beginning when I volunteered there I would work as hard as possible to gain the experience that I needed for teaching. When I got hired and when I started working there I began to slow down and take things a lot more easier. Its interesting because more than myself I’ve seen this with my own employer where he worked and worked to make his business successful and then started to ease up and take more time off for himself as his business was doing well.
Tina Loo 11:55 am on October 13, 2013 Permalink | Log in to Reply
Navreen, I like your example but if that’s the case, then is it really true that economic behaviour is universal? How can it be when you don’t pursue it all the time?
angieL 1:47 pm on October 11, 2013 Permalink | Log in to Reply
I believe economic behaviour is mostly universal. People have learned long ago, way before the invention of currency, to use barter system to maximize utility. It is only logical for one to trade with what they have in abundance in exchange for something that would be hard for that particular individual to obtain. This model of functioning keeps the cost of goods low and allows development and pursuit of specialization in a society. On a microeconomic level, the basic principles demand assumptions of such behaviour – that a rational individual will allocate his/her limited income to achieve maximum utility. And although I believe not all utilities are always derived from “material gain”, I would say there are self-serving motivations behind every individual’s actions and decisions. Since even seemingly altruistic acts such as volunteering and donating provide the individual with a sense of self-satisfaction, it can be argued that the altruism stems from the desire to fulfill self-interests. Relating back to our lecture, the gift-giving custom carried out by the Europeans to the indigenous, although the purpose of the act was not to gain immediate material reciprocation, was still an exchange and a pursuit of material self-interest in hope for material gain in the future. An example of my own behaviour in relations to the backward sloping supply curve is when I got promoted from a part-time cashier to a full-time administrative assistant. When I was working as a cashier, I worked extraneously hard everyday. I’d voluntarily stay late after work so I could do some extra work to help out my store manager. However, after I was promoted to an administrative position, I chose a more relax approach at work. I still did my duties and made sure the office was operating optimally, but I no longer put in extra hours after work and tried to get things done ahead of schedule so I have more time to enjoy leisure activities.
Tina Loo 11:57 am on October 13, 2013 Permalink | Log in to Reply
Angela, I like your example and wondered if we are stretching “economic self-interest” a bit much when we say that it includes altruism… We certainly do get something from altruism, but is it material, really?
angieL 1:18 pm on October 16, 2013 Permalink | Log in to Reply
You are right, I don’t believe there is a “direct” relationship in terms of economic or material gain. I guess it is a bit too cynical to question altruism!
doraleung 2:23 pm on October 11, 2013 Permalink | Log in to Reply
Though economic behavior is probably generally universal, there are moments when not everyone is just looking to maximize utility. But first of all looking at economic behavior is being universal, we can first look at the fur trade between the aboriginals and Europeans. These two groups established strong ties among themselves to strengthen their economic status. Even when aboriginals practiced gift giving traditions and such, they essentially had a material-gaining motivation behind it.
However, a situation I could find where people are not just motivated by material self-interest is whenever someone gets promoted at work, or a more efficient method of work is put into place. This is when the backwards sloping supply curve would apply. One would be able to put in less time and effort, but still be able to produce the same amount of utility if not more. Take for example an under ground musician who is not well known by the general public becoming an international award winning artist. During this artist’s early years, he is probably not motivated by material gains, and simply does what he does for the sake of doing it. Say hypothetically he gets discovered by a record label, gets signed, and becomes famous. He no longer needs to put in quite as much work to earn is certain amount of money. Even if he does need to work the same amount of hours, he is definitely earning much more than he was originally. Therefore he is spending less amount of time and energy to make the same amount, if not more, money.
Tina Loo 12:01 pm on October 13, 2013 Permalink | Log in to Reply
Great example of the backwards sloping supply curve Dora!
alexwickett 3:16 pm on October 11, 2013 Permalink | Log in to Reply
In my opinion, economics is universal and though some societies’ economies may not resemble ours, they are economical just the same. It is a basic human instinct to try to put yourself in the most competitive position possible, and that is achieved by doing things that will make you the most money, or the applicable equivalent. Unfortunately, we live in an unequal society. When there is inequality there is competition, and where there is competition there is bound to be people who want to lead the competition. In Canadian society everyone wants to be at the top, whether it be at the top of a company, the top of the class in terms of marks, or maybe even the best athlete, people thrive on the incentive to do well, and this creates a completely economical mindset. Even in societies where maybe money is not necessarily an incentive, people still prove to be completely economical whether it is through getting the best deals for a trade, or maybe even finding the best partner who will help take care of you in the future. It is completely normal for people to want to take care of themselves and do whatever they can to better their own position in society. I would argue that people are generally formalist as opposed to substantivists; economics is universal. A time where backward sloping supply curve could describe a choice I made is when I received a raise from my employer. I was working so hard at the beginning in order to make more than minimum wage over the summer, and finally when my salary was bumped up I breathed an effective sigh of relief, and began to relax a little more. Now that my raise has been given, I do not have really anything to work towards so I honestly do not put my full effort into my job. It is unfortunate but a very common occurrence that people want to better their own position, and once they have reached the top and do not need to do anything else to maximize their happiness, work and effort levels will decline.
Tina Loo 12:02 pm on October 13, 2013 Permalink | Log in to Reply
I like your example Alex, but does it prove that economic behaviour ISN’T universal? If it was, wouldn’t you have continued to work hard to increase your pay or otherwise get ahead by being noticed by your employer?
cprimus 4:17 pm on October 11, 2013 Permalink | Log in to Reply
The tricky thing about addressing whether or not economic behaviour is universal is determining what economics exactly is. I suppose you could say that it’s about the production and consumption of goods, in which case without certain goods human beings would inevitably die and indeed, that need is universal. The need to fulfill desires is universal. But economics in a financial sense? I disagree. The societal conditions of the native fur traders in the 18th and 19th centuries prove that economics alone, self-interest alone, is not entirely universal. While material self-interest is a motivator, from what I’ve read about Native history so far, it seems that the social conditions and way of life limited how many goods an individual could gain. These people were very community-oriented and because of this tribal culture shared a lot. As for the backwards-sloping supply curve, as the quantity drops, the price goes up. For example, if there were fewer beaver pelts available, they could be sold for more money or traded for a good of higher value or more product. So here’s the thing, they want to get as much as they can get, not for themselves but for the tribe. This illustrates the difference between tribal culture and contemporary ecomics.
Tina Loo 12:04 pm on October 13, 2013 Permalink | Log in to Reply
Christine, I think you are onto an important point: just what is economics? It might be different things in different societies, or different societies might perceive value differently (what is worth pursuing might differ). So if this is the case, then economic behaviour can’t be universal.
Tina Loo 12:10 pm on October 13, 2013 Permalink | Log in to Reply
General Comments on Week 6:
What struck me about your blogs this week is that almost everyone said economic behaviour is universal; i.e. all humans all the time in all places pursue their material self interest (=economic behaviour, = rational behaviour). BUT then you all went on to give me an example of how your behaviour matched the backwards sloping supply curve – so clearly there were moments in your lives where you didn’t pursue the bottom line, when you didn’t keep going after the $$. So…is economic behaviour really universal?
Also, a couple of you talked about other instances of seemingly non-economic behaviour; namely altruism (though some of you said we “get” something out of being altruistic!) and art. One of you talked about how many musicians, and I’d add, other artists often labour for years and years without making any money – in fact, they continue to do so knowing they won’t make a living from it. if they were really motivated out of economic self interest wouldn’t they give up and do something that paid better?
Bottom line (ha ha, pardon the economic pun): Historians are always suspicious when people make an argument about universal behaviour. After all, historians are in the business of looking for change over time and space….