As an individual, the economy is one of the most important matters of the century that we live in. As a consequence of inferiority, lack of education and lack of financial information, humans get in trouble and disasters. Life = Economy. If community is getting poor, they are having less ability to execute. As long as they are getting rich, they can perform better in terms of development.
The new generation Techno entrepreneurs, regardless of which sciences or engineering, regardless of how much they are gifted for that profession, regardless of how interesting their ideas are, the most successful ones are knowledgeable about finance, financial engineering and life economy.
When we ponder about the change of the economic models, from the agricultural economy to the trade, and then to industry, and then to the information economy… Economic models are changing decennially… So, what is after the information economy? Have we reached the limits of the information economy? Yes, we have. The new economic model is ” LIFE ECONOMY ”
Authorities especially mean biology when they say “LIFE”. This is because biology will come to the center of everything step by step.
I have to say that, WE MUST BE PROACTIVE and define the knowledge matrix of new model.
There has been a great interest in life economy, and popular academic articles are published about this, behavioral economy. You probably know, The Nobel Economy award in 2017 was given to the works in this field.
Life Economy generates an idea about why human being sometimes behaves irrational, when paying for a glass of coffee, which house to buy, or how much savings for a healthy life. And it uses biology psychology and economics for modelling.
The Life Economy explains why an individual chooses Y instead of X. It defends opinions that people do not always act wisely while they make economic decisions, make decisions under many social, cultural and psychological influences, and that also economic policies should be arranged and applied considering these factors.
These economic policies that is talked about, can be on company or individual basis, as well as on state and even international policies. In US, it has been decided to use of the principles of life economy (or behavioral economy) in public projects.
The Life Economy idea was generated in 1980s. While creating new theories, not only analysis with mathematical data but also biological, psychological and sociological elements were applied. Human beings may not always decide to maximize profit or benefit. Because of the psychological reasons such as risks, uncertainties, desire to gain status (or reputation), human can leave the rationality.
Based on this, two basic criteria of Life Economy are “Ownership Effect” and “Loss Aversion”.
When people make decisions, they cannot always take the right steps and in some cases they can be irrational. They pay attention not only to their own gain, but also to others’. For example, One may prefer that “a fair distribution that brings him less” to “unfair distribution that brings him more”.
We have a problem with our self-test in our future decisions and we may not abide by the decisions that we make today, when the time is ripe. For example, someone, who plans to lose weight, eat healthy or save money from tomorrow on, may not respect his decision by eating burgers or shopping again, when tomorrow comes, so he regrets. With this, it shows us, how human / biological and psychological factors affect both the behavior of people and the functioning of the markets.
One of the important concepts in the field of life economy is “self-control”. It is possible to understand this, people may trust (or not trust) themselves in the future. A simple example of this is; The remaining part of cake are brought by the guest is given back to the guest after eating if he thinks he will get more cake in the future. Or again, If the person actually thinks that he may immediately spend his salary as long as receive it and he does not trust future version of himself for saving the money, he may not know what he does now.
If these are behaviors and facts that are not explained with rationality. And If people behave like this, Economic structure must prompt the human’s needs as it is.
With the industrial revolution, the importance and meaning of the works have changed and working life has been a part and parcel of human life. Today, the importance and meaning of working life changes increasingly at the enormous speed of technological developments and with this, interest in the Life economy increases. Life Economic deals with the economic and social problems of societies, proprietarily labor and management relations in business and working life with a multidisciplinary approach and comes up with rich and different content.
The life economy also brings together different disciplines because it handles fundamental issues, the biological, social and economic life of societies.
In the Life Economy, labor is the most sacred value. It has an importance from other factor of production, because it is about the human. Because That the labor is a social being besides the dimension of creating economic value makes it special. In addition, because of the specialty of being the production factor of labor and because of related to humanity, it differs from the others.
Finally, “We don’t have a luxury of being late on this matter”. Expert and authorities should discuss what we need to do and define new structure as soon as possible.
Because LIFE IS ECONOMY.
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