Gary Becker's Contributions to Economics
Gary Stanley Becker was an American economist who was born on December 2, 1930, in Pottsville, Pennsylvania (Becker, 2008). The great economist who was conferred an economics Nobel Prize in 1992 died on May 3, 2014, in Chicago, Illinois due to the complications following a surgery (Becker, 2008). Becker was the professor of economics and sociology at the University of Chicago. He applied different techniques of economics to certain elements of human behavior, criminology, demography, and anthropology. The economist's major concentration was on rational economic decisions that are grounded on self-interest, as self-interest governs most of the facets on how humans behave thus influencing the economic behavior in various fields (Becker, 2008). Therefore, Gary Becker's salient economic contributions promoted understanding of the economic thought in diverse situations because of their profound effects on the economic thought, which are evident even today.
Gary Becker's Significant Contributions and Their influence On Economic Thought
Gary helped in spreading economics into various fields as mentioned earlier and he also performed an economic analysis in discrimination, human capital, family rapports, crime incentives, etc. Becker's first contribution is about the economics of discrimination; Becker conducted a research where he revealed that the people who are discriminated are not the only ones who get affected but also the employers who gave jobs to representatives of a certain race, religion, sex, or even nationality (Becker, 2008). The economist disclosed that the competitive markets played a major role in lessening the discrimination practices due to the profit motive of employers to hire the workers who have encountered the biased treatment and whom they will pay lower premiums. Therefore, this helps employers in implementing perfect investment strategies to earn more revenues since the labor costs will decrease, as they are paying low wage rates (Becker, 2008).
The second contribution of Professor Becker includes the analysis of crime from the utility maximization perspective whereby he claimed that most criminals made a sound decision and thought it would be better to commit an offense since the payout was superior as compared to the cost of the delinquency (Becker, 2008). Becker further asserted that the repercussions of such a decision by offenders embraced harsher judgments, and it augmented the probability of the authorities to catching many more criminals. Through this economic thought, the government understands fully how the lawbreakers think; thus, this assists the public bodies dealing with delinquents to detain them due to the development of perfect strategies hence reducing the number of malefactors on the streets (Becker, 2008).
The third contribution is about family economics, which is majorly concerned about the effect of family behaviors on economics. In the family economics, Becker studied marriages, divorce, fertility, and the rotten kid theory (Becker, 2008). Regarding marriages and fertility, Becker indicated that the former impact the apportionment into couples and personal welfare while fertility is relies on a marginal cost and marginal benefit context. The research on marriage and fertility was grounded on the influence of higher real wages in snowballing time value and the homemaking costs such as childbearing and rearing. Still with regard to the marriage issue, in his book, A Treatise on the Family, Becker explains how a man and his wife seek to attain equilibrium in marriage (Becker, 2008). Concerning divorce, Becker conducted a research and concluded that divorce rates increased with the unexpected decrease in income. With respect to the rotten kid theory, Becker formed a hypothesis where he claimed that there are certain situations where children with bad manners would adopt some strange behaviors exhibited by other family members especially parents just to gain more from the latter may it be special treatment, financial benefits, etc. (Becker, 2008).
The economist's fourth contribution deals with human capital. Human capital describes the set of abilities, education, training, and physical proficiencies that people utilize to earn money (Becker, 2008). Gary undertook a study and defended it via convincing many people that individuals make their choices of capitalizing in human capital centered on the cogent paybacks and costs that comprise ROI (return on investment) not neglecting the cultural aspect (Becker, 2008). Becker further explained that meeting targets, punctuality, good behavior, and higher education are the positive impacts of human capital while such issues as alcoholism, lateness, duty absconding are the negative effects of human capital (Becker, 2008). Moreover, those who perfectly understand the essentials of human capital can establish strategic goals and invest in human capital firms thus helping others in developing their careers. Therefore, Becker deduced that human capital is crucial in determining the economic growth rates.
Fifthly, in Becker's studies, he considerably contributed to household economics since he stated that a family's conduct could be applied to investigate utility maximization and behavior (Becker, 2008). In this context, a family can be compared with a little factory that avails meals, shelter, entertainment, childcare, etc. Becker's research established that no matter how much a family member may be selfish, he/she will always find ways to make his/her family better, i.e., he /she would always seek to maximize the little factory's utilities hence benefiting all the relatives (Becker, 2008). Therefore, the family can be used to explain the issue of the financial market theory whereby the family members are taken to be the investors while the efforts they put into their family success are the capitals, and the family success is determined by the returns they get.
Lastly, Becker made a substantial contribution to free market of organs. In 2007, Gary Becker and Julio Elias wrote an article that was titled "Introducing incentives in the market for live and cadaveric organ donations," where it was proven that free markets could aid in deciphering the glitch of organs transplant paucity such as kidneys (Becker, 2008). However, this publication was criticized by the assertions that the market was capable of taking advantage of the needy donors from the developing nations. With this knowledge, the developing countries' governments can formulate strict government policies that would help in protecting the citizens who donate their organs (Becker, 2008).
In my opinion, Becker's above-mentioned economic contributions are still useful in analyzing and dealing with the current economic issues. For instance, his research regarding discrimination is applicable to various discrimination practices in the contemporary world where people discriminated against tend to have a lower self-esteem. Thus, they might be abused by their next employer, as such individuals may be scared of fighting for themselves. The employers may also lose a lot if clients decide not to do business with them due to the employees' age, race, religion, etc. With regard to family economics, Becker's contribution is still relevant today since marriage is associated with family earnings, and even if the couple has more money, the latter will be more committed, as child rearing will require considerable expenses as well as education and upkeep. Concerning the matter of divorce, some divorces are prompted due to financial constraints. According to the rotten kid theory, spoilt juveniles tend to be unruly just to attract their parents' attention and make other gains even nowadays.
Furthermore, since crime rates are increasing every day, Becker's utility maximization perspective is still in place, as criminals (for instance, thieves) are likely to think that what they will make from stealing if they are not caught is far much bigger than honest earnings. If they are revealed, they may be fined a small portion of what they stole but some gains will remain. Nonetheless, criminals may also receive hefty punishments for their offenses; therefore, crime rates will decrease. In respect of the human capital contribution, today, education, personal capabilities and good morals at work are the key aspects of human capital growth.
America's greatest economist, Gary Becker contributed significantly to economics and conducted various studies on such topics as human capital, discrimination, crime and punishments, family economics, etc. His findings are still relevant in analyzing and dealing with numerous emerging issues in the contemporary world, in particular human capital helps in guiding employees in their career growth. Discrimination assists in understanding why certain situations happen in different organizations and why people who have been discriminated against behave in one way or another. Family behavior economics also explains divergent economic behaviors via families. Finally, crime and punishments justify why some individuals may choose to commit offenses and how the penalties they receive may prevent them from repeating criminal activities.
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