Limits of Personal Advice and the Importance of Family in Society

It’s impossible to predict the behaviors and actions of any one individual. So how can economists ever hope to understand the effects a shift in policy will have on the consumers within the economy? While individuals behave irrationally, groups give us more insight into understanding behavior and the impact those decisions will have on economics.

For economist Gary Becker, one of those fundamental groups is family, “One of the things that families do is to care for their children, to invest in their children, to teach their children morals, skills, and other forms of behavior. Human capital deals with the acquisition of education, training, health, and other skills by individuals that improve their capacities to earn money, to acquire skillful jobs and to otherwise perform well in modern, or less modern, societies.”

Listen to his conclusion of the economic effects these choices have in the latest episode of the Free To Choose Media Podcast.