The dynamics of postmodern economics defies the logic of times past. Everyone used to know that there is no such thing as a free lunch and that flawed financial actions always have consequences. Common sense dictates that national economies should function like home economies. People should not spend more than they make or take unreasonable risks, and everyone should always save for a rainy day.
However, these simple rules no longer seem to apply. Suddenly in these times of the COVID-19 crisis, everything is “free”: stimulus checks, benefits, paycheck loans, and medical care. The government can spend with reckless abandon. Trillions of dollars of debt are rubber-stamped with little fanfare. Meanwhile, the business world maintains its dependence on cheap money and government largess.
All these trends impact personal finances. Many people have embraced debt and entitlements as a way of life. When things get rough, people turn to the government to rescue them from disaster.
Perhaps the worst of it is that there seem to be no consequences. Things seem to keep on functioning as if nothing drastic has happened. People seem to keep living happily ever after – until the next crisis strikes.
On the surface, postmodern economics seems...
Economics can be a brutal science. Its focus is limited to a particular part of human activity that deals with the process of wealth creation, acquisition, production, and consumption. It measures what has, and not what should have, been done. Economics is also a science of measurements. By calculating profits and losses, businessmen can plan for the future. On a larger scale, international standards of measurement help economists develop monetary policy, make economic forecasts, and monitor growth. But greed, fraud, and theft can easily find their way into financial transactions. That is why economics must be subject to those higher normative sciences like ethics that regulate all human behavior.
However, there is increasing pressure to change the moral dimension of economic measurements. Traditionally, economic figures only dealt with the value of legal activities. Now officials are arguing that illegal transactions should also be included.
According to the Wall Street Journal’s Jo Craven McGinty, the main force behind the push for including illegal activities in standards is the United Nations. The UN promotes its System of National Accounts, or SNA, as the universal standard of economic analysis. The SNA includes the familiar Gross Domestic Product, which is a calculation of all...
