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Economics Can Save the World

 by Bennett Gordon


Tags: Politics, economics, profit-seeking, Elinor Ostrom, Yes,

Hidden amidst the profit-seeking and selfishness of economic theory, Elinor Ostrom, the first woman to win the Nobel Prize for economics, found some hope for the future. She told Yes!:

I don’t see the human as hopeless. There’s a general tendency to presume people just act for short-term profit. But anyone who knows about small-town businesses and how people in a community relate to one another realizes that many of those decisions are not just for profit and that humans do try to organize and solve problems.

If you are in a fishery or have a pasture and you know your family’s long-term benefit is that you don’t destroy it, and if you can talk with the other people who use that resource, then you may well figure out rules that fit that local setting and organize to enforce them. But if the community doesn’t have a good way of communicating with each other or the costs of self-organization are too high, then they won’t organize, and there will be failures.

Source: Yes!