By the end of 101, we all know that consumers maximize utility and producers maximize profits. But what does this mean in a societal sense? An interesting blog entry over at Scientific American states:
"In 2008, two research teams demonstrated that people process social values in the brain’s reward center: the striatum, which also responds to monetary gains. That these two values share a cerebral home suggests we may weigh our reputation in cash terms. Whether we like it or not, attaching a monetary value to social status makes good scientific sense. Much of what revs up this reward center—food and recreational drugs, for example—is associated with a temporary rush of pleasure or good feeling, rather than long-lasting satisfaction." (see here for full post)
It is a bit startling to think that a luxury buy has the same biological impact as chocolate cake or beer but I can go there. But other researchers also found that
"even if you are someone who really relishes fancy wares, buying stuff for yourself is not the most effective way to increase your feelings of self-worth. A far bigger benefit can come from giving to others. The effort you make to support another person often spawns a strong friendship, which has lasting gains for self-esteem, reported psychologist Jennifer Crocker, now at The Ohio State University, last year at the convention of the Association for Psychological Science (see “Give and You Shall Receive—A Boost to Your Self-Esteem”). And in a study that came out a few years ago, scientists determined that people got the biggest boost in happiness from money when they gave it to someone else (see “Money Can Buy Happiness”)."
So this, to me, may imply that there is a biological argument for progressive taxation. To be a bit snarky about it, Romney might gain more lasting utility from paying more than 15% of his income in federal taxes.
Is that why some professions are so much more attractive than others? For example becoming a doctor helps lots of people and there is also a big salaried benefit. However, someone who cares a lot about our natural resource and goes into a profession more dedicated towards recycling is helping others but not necessarily with the big pay off. The same can go for politicians where they may seem as though they are only helping themselves when we know that this isn't the case. Helping others can give a big "high" to those who use it properly. Interesting article!
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