103 - Through his extensive study and famous Nobel Lecture...

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Through his extensive study and famous Nobel Lecture delivered December 9, 1992, Economic Sciences Laureate Gary Becker expanded the sphere of economic analysis to unprecedented areas of the social sciences. Becker’s unique methodology develops from the assumption that the individual adheres to the same fundamental principles of decision making amidst a variety of circumstances. Becker refers to his system as The Economic Approach, which is distinguishable by its assumption that the members of households, firms and other organizations behave rationally and with purpose. These members or agents, as Becker explains, can be expected to maximize an objective or goal within the group, including utility and wealth (2) . Highly notable contributions to the world of economics and social theory stem from Becker’s application of economic analysis toward discrimination, crime and punishment (as well as law enforcement), investment in human capital, and perhaps most ground breaking, to the behavior and function of the family or household unit. One cannot help but gain a new and fascinating perspective as Becker’s every word demonstrates the manner in which “Economy is the art of making the most of life” (2). As Becker begins his lecture, he first seeks to define The Economic Approach, which emblemizes his work, spanning decades of research and theorizing. By contrast to Marxian analysis, Becker’s theories do not center upon an assumption of individuals being naturally selfish. Instead, he argues that behavior is determined by a more diverse system of values and preferences (Becker, 38). To conduct such analysis, Becker’s method makes the assumption that individuals maximize their own welfare as they perceive it, regardless of the diversity of behavioral traits. Also, Becker derives that behavior is forward looking, and remains consistent as time passes (Becker, 38). The past
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is not entirely avoided in this sort of analysis, as past experiences tend to unavoidably shape our current experience and sentiments about a subject as well as expectations of future events. In addition to motivations for actions, so too are there constraints present in any economic decision. Among the most significant of constraints are income, availability of opportunities, imperfect memory, calculating limitations, other limited resources, and the most central constraint to action is limited time (Becker, 38). Such concepts are not new to discussions of economic decision making and as is the case with traditional economic theory, utility maximization remains a central focus of behaviors of people in various circumstances; one always seeks to get the most of what he wants out of what he has and is willing to sacrifice to achieve that desire. As Becker transitions his speech, he introduces four distinct subjects to which he
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This note was uploaded on 05/11/2008 for the course MUS 109 taught by Professor Mooney during the Spring '08 term at University of Arizona- Tucson.

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103 - Through his extensive study and famous Nobel Lecture...

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