Becker’s Rational Theory

Gary Becker is both(prenominal) a sociologist and economist although he win the Nobel Peace Prize in 1992 for his quick of scent theory for economics. The lecture he gave for the Nobel was divided into six cata handsias his economic approach to life, his view of the discrimination against minorities, his theories on crime and punishment, his understanding of humankind crown break, his perspectives on family ties and how he believes throng testament accept the theories he had proposed. Beckers persuasions atomic number 18 refreshing, if not al unitedly refreshing and worth understanding.First of all, he distinguishes his analysis from the Marxian perspective. He exempted that the communist archetype is purely based on utilitarian terms while his excogitation of reasonableity is a method of analysis and not an assumption round particular motivations. (38) His approach is founded on the idea that era has its own represent. He argues that many human revealments tolera te been do to extend life presen clipnt plainly no one loafer alter the pace of time from twenty-four hours to an opposite pattern. Thus, time has its equal and as well as affects the resources that people shambling because of its price.Becker live withs hiring of workers and discrimination into a new light with his idea that the employers may normally be the source of discrimination but in truth, the employees and customers of a smart set also contribute to the decisions being through on employment. He cites that around workers refuse to be assigned under a woman and authorized clients may prefer to deal with white instead of black gross revenue agents.One of his theories on discrimination is that when the quantity of the majority of a harmful relationship is greatly higher(prenominal), the income of the mentioned party depart be untold higher while those of the minority group will be very limited. However, Becker also believes that if the prejudicious group is sm aller in quantity comp bed to the group they reserve chosen to outcast, then the prejudice will be harmful to the prejudicial people.Becker also polemicly cites that the popularized beliefs of employers, t to for each one oneers and some other soulfulnesss of influence on the community stinker wee stereotypes that be harmful or counter-productive. He bases his assumptions on the premise that facts of life is an investment because previous studies show that putting more time and money in getting academic training boosts a persons chances to become economically successful. Stereotyping people causes these minorities to change magnitude their tuitional investments both academically and c argonr-wise. This makes them slight productive to society. It is worthy to note that Becker highly believes that education is a very tidy investment for the economy and that learning tidy sum be hindered by prejudice. other institution Becker chose to analyze is societys view on crim e and punishment. Becker sought to explain that crimes like theft may not seem to cost the society very much but criminals also invest on weaponry and premeditated mean which could sop up been put to better communal use.The Nobel winner explained that in the mid-twentieth century, crimes were viewed as originating from mental illness and social oppression to the point that criminals were made to case like dupes of society.These, therefore, affected social policies by talent criminals more rights, diminution the chances of apprehending and convicting criminals while lessening the security of the rest of the innocent. In his economic point of view, Becker believes that policies must be geared towards higher costs of punishment for criminals to admonish them from making their crimes a livelihood. He believes that to lessen crime, the economic and social environs formed by public policies (e.g. expenditures for punishments, employment opportunities, educational programs) must be taken into consideration. If the legal jobs were paying much higher than what would turn out been gotten from a quick crime, then it would lessen the probability of criminal acts.It was Beckers ideas that take away inspired virtue Professor, David Friedman (1995) to propose other manners of fighting and preventing crime. found on the Nobel awardees theory, the professor suggests that instead of paying policemen regular salaries, these officers should beneficial get what has been collected from the criminals he had apprehended and caused to be convicted.In this scenario, the victim shall pay for the investigation of the crime to the police so that investigative jobs will be allocated well to the uniformed men. According to Friedman, this will lessen the cost of taxes that ordinary law-abiding citizens pay for protection and judicial courts. When the criminal is fit to pay the damages he had brought about, then the victim and police fork over been paid. In this way, the police man are not tempted to accept bribes from criminals while the cost of implementing justice is greatly lowered.Another point of view was precondition by Dr. Mark Thornton, Senior Fellow at the Ludwig von Mises Institute, this time contradictory to Beckers. after(prenominal) his winning the Nobel, Becker became a staunch believer in the legalization of drugs to lessen its harmful impact on society. On the other end is Dr. Thornton who made a paper entitled, Harm Reduction and ill-doing TaxesWhy Gary Becker is Wrong, to responsibility his points. According to Becker, legalizing drugs would bring in positive results if excise taxes will be created to make the price of these drugs less affordable. However, according to Dr. Thornton, the taxes will still not eliminate the consumption of dangerous drugs but will nevertheless supercharge production and consumption of more potent forms of these drugs. Marking legal drugs as harmful will only make these even more fetching to young teen s and adults. Putting excise taxes will make the drug excessively costly for those who truly need it which might lead to consumers preferring a less expensive yet more harmful kind of solution and the system of a black market. Thornton further argues that there is no proper way to calculate the tax rate. (12) IIn Thorntons light, he reveals that Beckers ideas may be highly theoretical but not pragmatical because it does not take its effects on society as critically as it should.One subject that may give Becker a Marxian connexion is his use of the term human capital. Although the term he uses is Marxist, he does not intend it to mean something utilitarian. Instead, Becker chose to use the term as a expose for an analysis that bases its assumptions on how individuals choose their education, career training, medical care and other additions to knowledge and health by weighing the utilitys (cultural and non-fiscal) and costs (value of time exhausted on these founding investments ). (43)Becker identifies two theoretical concepts used in human capital analysis which are the general and specific training or knowledge. Becker believes that general training is simply knowledge of how to make things work but specific training or knowledge refers to an individuals expertness in climbing up and down the authority structure of the connection he or she works for and includes the talents that may be necessarily giving this employee more value to the beau monde. With this proposition, human capital becomes an asset of a company as part of accounting principles.He further explains human capital investment in the light of marital relationships. He believes in the idea that nuptialss are unions that are based on the theory that putting together two peoples resources would make them stronger economically. Thus, divorce rates are affected by the financial stability of husbands and wives. This also explains wherefore the liberal cast off lower divorce rates compared t o couples who are problematic in their finances. Although romantics may want to challenge this idea, the statistics will provide Becker with more express rather than refute his contentions.Human capital is founded on the idea that education is an investment. Becker offers his human capital analysis to explain the gender gap in earnings of men and women. Traditionally, women were more likely to get poorly-paid jobs because they spend time taking of children first before they throne invest more prudence to getting better education or training. However, the decline of family size in the past decades, growth of divorce rates that will single mothers to work for a living, plus in the fulfillment of job vacancies brought about by industrialization and legislation has been able to give women more opportunities for career and financial stability.Becker believes that his rational choice way of analyzing life can also explain the formation, dissolution and structure of families. The fami ly is the oldest and most basic of all institutions. Becker already mentions that marriage is a union that is made between individuals who believe that staying together would benefit them both. Divorce, then, would be made if the two individuals believe that economic stability would be achieved without the other.One of the controversial principles regarding family and economics came from Malthus who believes that fertility would rise as incomes increase and would decline as incomes decrease. This theory failed when the modern era showed that as modify countries were becoming super economic powers, birth rates started to dwindle. According to Becker, the only problem with the Malthusian principle is that it was not adaptable to modern life. red-brick people put great value in time and so taking care of children costs greatly. Parents also recognize that the success of their children are based on the good quality education and training they are able to get. This raises the cost of in vestments even more which leads to couples having less children. This ex excogitateation also addresses why more and more women are entering the labor force. With fewer children to tend to, women are freer to pursue their careers.Becker also sought to analyze why there are societies wherein gender roles seem to attribute to women the child-rearing and agricultural activities compared to the men who are delegated to do the fighting and market work. He believes that these are because of biologic differences and cultural conditioning. He incorporates his human capital analysis by construction that any investment in education requires practice and that since men have more time to delve into the sporty and marketing skills, they are the ones given the gender role. Women, on the other hand, are in addition busy with children to develop their own talents and skills and would do better in simply doing what else should be done to uphold the family.Becker believes that the way one is rai sed has a lot of header on how one thinks and acts as an adult. Choices adults make in life are based on their childhood experiences. Therefore, the family is a very important institution in society because the preferences that are at work in his rational theory are formed when people are growing up.Another aspect of family life Becker chose to single out was the issue of altruism. Based on the Rotten-Rid Theorem, selfish individuals use altruistic behavior to ensure their own welfare. Therefore, parents and children can strive to uphold altruism within their families because of their own selfish purposes.For example, parents who are not planning to leave bequests to their children strive to uphold love, guilt and supporter among family members to ensure their welfare once they grow old. By imbibing set such as caring, older children are made to feel sheepish when they cannot take good care of their old parents.Parents who do not plan to leave bequests to their kids tend to stri ve to work or assist their children in house livelihooding to compensate for their lack of financial contribution. With children who have been taught to give dressing something in return while they were young, the kids will be obliged to take good care of the old parents. Parents who are not planning to leave bequests can also give their children the best investment they can have education to ensure that when they are already old, the young ones will be able to provide for their needs. With these in mind, Becker makes a funny proposal for parents to have contracts with their children to oblige them to take care of the old couples once they are too weak to work.With his analysis of familial relationships, Becker also realizes that social institutions like homes of the senile are contributing to the breakdown of families. With the government taking care of what could have been someones responsibility, the family members communicate less and become estranged from each other.Other s ources of this problem are greater geographical mobility, increased riches due to better national economy, better capital and insurance markets that create financial endowments for these responsibilities, higher divorce rates that separate family members from each other and even health care which also takes care of things so that people can continue to work instead of taking care of each other.Becker concludes his lecture by summarizing the main points he had so far mentioned. He also predominates any oppositions to his claims by saying that since his concepts are based on economic or rational choices towards behavior, many critics have already raised issues about individuals not acting consistently all the time and that behaviors are not always forward-looking (especially the ones of criminals).Becker counters these allegations also by explaining that his rational choice theory is not simply an economic approach limited to the little level. He believes that the theory can be a ve ry good and powerful tool to use to understand and derive implications on the macro level. Backer believes that using assumptions about technology and other determinants of opportunities, market and non-market situations, laws, norms and traditions can help obtain better results about group behaviors.Beckers ideas are truly remarkable. Some are simply a review of what has been incident to society (e.g. family dissolution) while others like his view of crime and punishment are refreshing and obviously revolutionizing social policies and perspectives. His view on crime, particularly, raises many controversial questions towards practicality especially because it concerns the security of many innocent people. Controversial or not, his rational choice theory shines a new light towards how humans keep adapting to the society he is forming at every moment and this makes him worth of the Nobel Prize. plant CitedBecker, Gary. The Economic Way of Looking at Life. Nobel Lecture. 09 December 1 992Economic Sciences.(1992) 38-58.Friedman, David. noetic Criminals and Profit-Maximizing Police Gary BeckersContribution to the Economic Analysis of Law and Law Enforcement. 23 March 2008. http//www.daviddfriedman.com/Academic/Becker_Chapter/Becker_Chapter.htmlThornton, Mark. Harm Reduction and Sin Taxes Why Gary Becker is Wrong. 23 March 2008.