Why should economists care about discrimination?

Household - Market - Consumption

Birgit Weber

To person

Dr. phil. Birgit Weber is professor for didactics of the social sciences at Bielefeld University. From 1989 to 2006 she worked in the field of economics and didactics of economics at the University of Siegen. From 2000 to 2002 she headed a project to promote entrepreneurship in teacher training as managing director of the Center for Teacher Training. As the deputy chairwoman of the German Society for Economic Education, she helped drive the development of educational standards for economic education. In addition to fundamental questions of didactics in economics and social sciences, her specialist areas of focus are above all the culture of entrepreneurship, environmental economics and questions of the relationship between state and economy.

Email: [email protected]

How decisions are made to meet needs is the subject of scientific research. Depending on the interest in knowledge, economic theories have different explanations.

Reading or lazing around? That is also an economic decision ... (& copy picture-alliance / AP)

The compulsion to do business

All people have to do business, even if they are not always aware of it. On the one hand, different, varied and changing needs, which often conflict with one another, have to be satisfied. On the other hand, the means available for this - income, labor, time - are not unlimited, but scarce. Therefore, people always have to make choices about what needs they want to meet with what urgency and how to use the means to meet the needs.

In the following, needs, shortages and choices are examined more closely in order to then discuss the possibilities and limits of the various theories that explain the decisions and functions of private households. At the end there is the question of whether people's decisions are mainly based on the rational maximization of benefits or the longing for a "good life".

Needs as feelings of lack

Needs are generally seen as the desire to remedy a perceived deficiency. They are typed differently depending on the normative objective. A distinction is made according to
  • Existential, cultural and luxury needs in order to set priorities in distribution conflicts;
  • vital, social and spiritual needs, in order to make it clear that human dignity is not yet taken into account in the mere maintenance of survival needs;
  • Present and future needs, in order to clarify the trade-off, because present needs are often felt more urgent than future ones;
  • Individual and collective needs in order to clarify whether the responsibility for satisfying the need lies with the individual or with state bodies.
These distinctions have their weaknesses. What is a luxury need today may have lost this status tomorrow. In the 1950s, television sets were still considered a luxury product, but today in German society they can hardly be dispensed with as a prerequisite for a dignified existence with cultural participation. Such delimitations are politically relevant if
  • the support for livelihood is determined on the basis of a shopping cart, the content of which is to ensure a decent life;
  • For the services to be financed by statutory health insurances, existentially necessary services are to be distinguished from luxury services (such as cosmetic surgery);
  • a reduced sales tax is to be set for goods with which a minimum supply of all population groups is sought, such as for food, local public transport, books, newspapers and cultural performances.
Collective and individual interests can fall apart. If many people have only a weak individual need for education because they attach greater importance to current desires, the collective need for competitiveness and innovation can suffer as a result. In this case, individual interests can be influenced by the introduction of compulsory schooling and student loans.

The best-known typology of needs goes back to the psychologist Abraham H. Maslow. He wanted to discover how personal development is also influenced by social factors. To do this, he differentiated different levels of needs:
  • physiological needs for existential survival: hunger, thirst, sleep, sexuality;
  • Security needs related to physical protection and security as well as their security in the future;
  • Needs for social bond or security and love;
  • Needs for social recognition and validity;
  • Needs for self-realization;
  • Needs for knowledge and understanding;
  • Aesthetic needs.

Hierarchy of needs based on Maslow
Maslow assumed that a higher need can only become valid when the lower need is satisfied. It is only when hunger has been removed that one harbors spiritual needs, for example. He also differentiated the need groups according to whether the satisfaction of the needs is subject to satiety (restitution needs) or whether the satisfaction is not subject to any limits (growth needs).

Maslow's typology also met with criticism. This related less to the differentiation, even if many other individual needs can be assigned to the very general needs mentioned, but above all to the fact that Maslow saw hierarchical development stages in the order, as they are often expressed in a pyramid. Of course, nobody can do without the satisfaction of physiological needs for a long time, but at the same time, and not only secondarily, they will be interested in social ties and free self-determination. However, it does seem plausible that satisfying physiological needs that is perceived as insufficient does not necessarily have a beneficial effect on social behavior, development opportunities and self-esteem. In addition, the needs for security, social recognition, self-determination and self-development are individually different, even if the supposedly lower level does not seem to be satisfied. Needs on the different levels are not only felt at the same time, but are also linked to one another. While people in emergency situations primarily hope that food will satisfy their hunger, in affluent societies, for example at family dinners or when inviting guests, it serves both for social bonding and recognition as well as for self-development and aesthetic needs.

Studies that examine the importance of goals in life unanimously determine the high value of successful social relationships. In surveys, the highest values ​​are given to "happy partnerships", but also to "being there for others", ie goods that cannot be bought. However, this can also result from the fact that the vital needs of many people are considered satisfied or not endangered - or that they were not asked about at all.

Development from need to demand
A feeling of deficiency does not yet mean that only goods and services traded on the market can or must satisfy the respective need. A sunset can be enjoyed on the balcony at home as well as on a long-distance trip on the beach. Needs must therefore first be concretized as a need for certain goods in order to then appear on the market as a purchasing power depending on the financial conditions and hopefully ultimately to generate the desired benefit by using the appropriate offer. Accordingly, modern market advertising for products and services usually targets different levels of need. Food today is still primarily intended to satisfy hunger, but the various products are also advertised as contributing to health maintenance (security), promoting sociability (security), making people slim (validity), enabling romance (aesthetic needs) or enable the individual to perform better (recognition, self-realization).