The Third Law of Natural Economics

Since the second LAW OF Natural Economics states that human nature provides a good model with which to analyze economics, we are naturally led to ask what characteristics of human nature are relevant. Is there an aspect of our nature that compels us to behave in a certain way when we choose to expend our natural resources in pursuit of an economic result?

    If you look around you and examine how people are using their time and energy you will see an immense variety of pursuits. We might make judgments about these activities saying that some are productive while others are a complete waste of time. If you examine your own behavior honestly you will probably be able to make similar judgments about your own activities.

    We can also recognize that we can be influenced by many circumstances and other people operating in in our environments to behave in particular ways.

    When we think about the vast array of human behaviors in can be difficult to find common threads that hold true for all circumstances.  It is easier to find common threads when we examine our behavior free from other influences.  If we can describe this kind of law, we would expect it to hold true even when we are influenced by other things. Basic behaviors are just easier to find if we think about how we behave without outside influences.

    Having examined human behavior from this perspective, I have discovered the third law to be as follows.

The Third Law of Natural Economics

Left to their own devices, human beings, both good and evil, will behave in a way that benefits their personal definition of a better quality of life.

This does not say that we always do what is best for us. If that were true, I might never eat chocolate or drink beer.  But, if I think that eating things that I enjoy benefits my quality of life, I would eat or drink those things in spite of any negative effect. When my weight becomes excessive, I may eventually decide it benefits my quality of life to try to lose some weight.

Notice that the third law allows for the idea that people do not always do what is in other peoples’ best interest either. You might think of this idea as a loose description of the difference between good and evil.  Ultimately, you need a system of values to make judgments about what is good or evil.  We will talk about that in future blogs.  If you would like to see a set of values based upon natural considerations and one which is consistent with the natural laws of economics, you can find them on this web site. They are called Natural Law Principles and can be found by following the Natural Law link at the top of the web page.  The concept of good and evil becomes an important consideration when we go back to the real world where we can be greatly impacted and influence by the actions of other people.  It is important to understand the difference between behaviors that are subject to value judgments and those which are truly universal.

A natural law should be universal. It should hold true for all people and all circumstances. If it is universal, if all people behave according to its basic idea, then no one should have cause to make a value judgment about the law and simply be able to recognize its truth.

I have examined a great many different human behaviors, some I consider good, others I consider evil. I find that the differences in human behaviors are accounted for by each individuals understanding of their personal idea of quality of life for themselves.

I encourage you to think about this as well and see if you can understand the fundamental truth of the third law.

Consider the following as an example. Many conservatives will tell you people who own and operate businesses are serving the public good by creating jobs and opportunities. Many liberals or progressives will criticize the same people for failing to hire more people, paying them too little, and accusing them of being greedy. Are they greedy or are they acting in the public good? That is a value decision and does nothing to diminish the fact that regardless of my value judgment or yours, the business owners are most likely operating in a way that they believe improves their life. Perhaps, they are at a point in their life when the profit is more important. Perhaps they have achieved enough that they feel they can give more back to the community and find that will improve their quality of life by doing so. In either case they would be acting according to the third law.