• Sanskaar Shetty


Causality refers to the relationship between cause and effect, and that of the ‘Why’ and its answer. Traditional Economics has taught us the three basic questions of an economy, i.e., what to produce, how to produce, and how much to produce. These questions form the foundation of any economic problem and its solution. However, the question of ‘Why’ and its significance in Economics has never been answered directly.

Thus, this article emphasizes the ‘Why’ of an economic problem and how it shall never be avoided. This article is based on individual assumptions and is subjective to an individual’s perspective towards economic problems and their solutions.

Traditional Economics has always ascertained that there are various traditional economic problems that economists and businessmen have to encounter while achieving their goals. The goal can be anything, ranging from earning profit to maximizing utility. Throughout history, there has been a debate over which question is the most important and transcends all conditions and boundaries, with the underlying assumption of Ceteris paribus.

The first question we have is ‘What to produce?’. While this question addresses the need for what is being produced by the producer according to his goals and aims, we have the second question as ‘How to produce?’.This question particularly addresses the production technique to be adopted in order to reduce costs and maximize profits.

Another question that we have is the problem of ‘How much to produce?’. This problem looks at the amount or the number of goods/services to be produced in order to maximize profits and minimize costs. These are the traditional questions and the problems of Economics. According to my perspective, many economists cannot ascertain the ‘Why’ and address the reason to produce. In every other aspect of human life, the question of ‘WHY’, is given utmost importance and weightage. It’s considered the essence of the activity to be undertaken or performed, but not with economic problems. In their case, this question gets ignored like the moon in broad daylight, hardly a few economists acknowledge the ‘WHY’ to produce as another traditional and basic problem of economics.

This is critical at present and in the future, where sustainable development is considered being an integral part of every activity undertaken regardless of an economic or non-economic motive. We have seen that the excessive industrial development in the last 50 years has given an unexpected boost to global warming and the exploitation of natural resources. Today we see business conglomerates, digging holes, nearly to the center of the earth just in search of metals. This is the reason for the question of ‘Why?’ needs to be answered as quickly as possible. Answering the question of why covers details like, need the activity being undertaken, the impact it will have on the entire ecology, are the potential returns satisfactory for the activity to be undertaken because we know that the original basic problems were developed during a period when there was no shortage of resources. The opportunity cost of items has to be weighed carefully before any activity can be undertaken.

Hence, it’s essential to address the question of WHY on a much greater scale. There might be economists that argue this topic is covered in WHAT and HOW questions. However, it’s only considered as a part and as a fragment of the questions, and not an individual entity. Hence, the integral parts of the question go unattended, if only, the question was treated as an important one.

In conclusion, treating the WHY as a major component of the basic problems is critical and important, since sustainable development is the future. Treating the problem of what and how to produce will not be enough, reasoning as to, is the production of that commodity a requirement or just a conglomerate’s attempt at expanding their business to earn profits, because from what we can see, sustainable development and use of resources in a manner such that its available for the future generation in ample quantities is going to become the priority, and elimination of all those goods and services that isn’t important is going to be an essential part of it. Hence the sooner we address the problem of WHY, the better it will be for ourselves.