Sunday, 11 March 2018

ECONOMICS AND ETHICS OF SPENDING



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Yes, Economics does not concern itself about the ethics of one’s spending as long as utmost satisfaction is being derived by the consumer. However, the ability to spend ethically would help us set our priorities right.
Economics according to Lionel Robbins (1932) is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses. While ethics refers to well-founded standards of right and wrong that prescribes what humans ought to do, usually in terms of rights, obligations, benefits to society, specific virtues or fairness.


SCALE OF PREFERENCE

S/N
ITEM
 AMOUNT(N)
01
SHOE
            5,000.00
02
MOVIE TICKET
            2,500.00
03
HEAD PHONE
            1,500.00
04
BOTTLE OF AlCOHOL
            1,000.00
05
NOTEBOOKS
            1,000.00
06
DEPARTMENTAL DUE
            1,500.00

TOTAL
          12,500.00
Economics only recognize a good spending as one which guarantees the rational consumer a maximum satisfaction of his/her wants. While ethical spending aims to satisfy the right need in accordance with what is generally perceived to be beneficial to the consumer by neglecting the concept of “human behavior”. For instance, a student with an income of N10,000 that has the following needs; a pair of shoe N5,000, a notebook N1,000, an headphone  N1,500, a department due of N1,500, a movie ticket N2,500 and bottles of alcohol of N1,000. Given the scale of preference below:

Such student would be said to have spent his income economically following that order as long as he derives maximum satisfaction from them. Thus, the order of importance by which humans wants are being arranged can be highly subjective. Ethically, such scale of preference is questionable for a student is his/her right state of mind since academic expenses ought to have priority over frivolities.
In conclusion, adequate assessment of individual want should be carried out when drawing up a scale of preference with an understanding that “it is not all wants that gives satisfaction are worth spending on” if we really want to have an ethical spending.


OGIDAN SAMUEL OLUWAFEMI

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