Abstract
Peace is a spiritual phenomenon, but it evolves through various disciplines – psychology, economics, biology, and so on. This is because human beings are complex in nature, and various facets of human existence are correlated with these disciplines. Peace is an integration of all aspects of humanism in a state of equilibrium. This chapter discusses peace as imbibed in ideas of microeconomic equilibrium. Economics is so often disapproved by spiritual thinkers as being a science of self-centeredness even after decades of progress in the subject matter after Alfred Marshall's “Principles of Economics.” This seems justified as today an ordinary man is still concerned with individual welfare first. Therefore, peace needs to be seen from this micro-perspective first so that the society may move to higher objectives later once the individuals are in equilibrium and have attained peace in this narrow but indispensable sense.
TopBackground
Economics, as an academic subject, is defined in various ways by different economic thinkers. It was defined as the science of wealth by Adam Smith, a science of material welfare by Alfred Marshall, a science of choice making under conditions of scarcity by Lionel Robbins, and as a science of choice making for sustainable development by Paul A. Samuelson. Each definition, in this order, has broadened the scope of economics and today the field has become all-pervasive. As this chapter discusses the concept of peace in economics, the author has chosen to discuss it through the microeconomic context; that is, through the study of individual units in economics such as individual consumer, individual producer and so on.
Key Terms in this Chapter
Microeconomics: The branch of economics which deals with the study of individual units of an economy.
Utility: Utility is defined as the want satisfying power of a commodity.
Positive Peace: A state characterized by the presence of positive social, economic, and political phenomena such as social and economic justice, equality of opportunities, political liberty, civil consciousness, and welfare.
Negative Peace: A state characterized by the absence of social, economic, and political phenomena such as war, terrorism, injustice, economic inequality, etc., which are generally considered to be negative.
Rationality: The ability to make logical decisions guided by cold calculations unaffected by emotions in order to maximize gains.
Real Cost: Real cost is defined as the efforts and sacrifices producer has to make for producing a desired output.
Equilibrium: Equilibrium in a general sense may be defined as a state from which there is no tendency to change till some external factor exerts a force on the system.
Profit: Difference between total revenue and total cost.
Revenue: The proceeds from sale of output.
Bounded Rationality: Bounded rationality means rationality within limits or bounds set by incomplete information, cognitive limitations of mind and limited time available for taking the decision.