In the end, economics is all about individuals choosing. As obvious as it might seem, this fundamental premise is constantly evaded and abandoned when the conversations among the people and the news around the world are jam-packed with fiery debates regarding macro-economic variables and the everlasting tensions between politics and economics, particularly the conflicts regarding fiscal and monetary policies.
Today, yet another social tendency can be explained through the basic principles of economic theory. We can summon the socio-economic institution of “choice” to explain what we might think is a social discriminatory conduct but one that has not been analyzed thoroughly: women earn less than men. During this four minute video, Prof. Steven Horwitz unveils the myth that differences of income levels between men and women are due to discriminatory conducts of society expressed through the labor market. Instead, he explains this variance by analyzing the choices that both men and women undertake before entering the labor market, particularly those regarding their education and their investment in knowledge and work experience.
Henry Hazlitt once made his case for depicting the spirit of a good economist that can serve us well for understanding the good spirit of a scientist in any field. In his book Economics in one lesson”, Hazlitt proclaims:
"in this lies almost the whole difference between good economics and bad. The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences".
Then, let us not be satisfied with the cries of society but rather be curious in understanding what lies underneath the superficiality of discrimination-targeted campaigns and any other social phenomena. Yes, women earn less than men, but do we know why? To each her (his) own...
Link for complete video: