The Fundamental Problem

In the present Part I, we will present some fundamental notions frequently used in economics. The sequence of the ideas to be discussed is not chosen arbitrarily. On the contrary, the discussion of each concept will generate a question leading directly to the following one. At the beginning of our journey through economic thinking we refer to the observation that human beings are endowed (and burdened!) with needs and are permanently attempting to satisfy those needs. A need is a feeling of suffering or dissatisfaction. Hunger, fear, loneliness, rejection and boredom are just a few examples which every reader may already have experienced to some degree. Probably the most prominent attempt to classify human needs stems from the psychologist Abraham Maslow. Maslow elaborated in detail on what he called the “need hierarchy”. At the bottom of this hierarchy he located the so-called basic needs. These he defined as fundamental physiological needs like hunger, thirst, tiredness or pain. At the next level above the basic needs Maslow saw what he called safety needs. Safety needs can be best circumscribed using the terms “fear” and “anxiety”. Human beings may perceive the world as hostile and threatening. They feel endangered by wild animals, criminal assault, murder, social chaos, revolution, tyranny, war, disease, natural catastrophes, breakdown of authority and so on. At the third level Maslow described belongingness and love needs. Love needs are in existence whenever humans suffer from loneliness, ostracism, rejection, friendlessness, and rootlessness. Maslow identifies belongingness needs as feelings of alienation and strangeness. Belongingness needs manifest themselves as a lack of group feelings, contact, intimacy and real togetherness.