Definitions of economics


There are a variety of modern definitions
of economics. Some of the differences may reflect evolving views of the subject itself
or different views among economists. The earlier term for ‘economics’ was political
economy. It is adapted from the French Mercantilist usage of économie politique, which extended
economy from the ancient Greek term for household management to the national realm as public
administration of the affairs of state. Sir James Steuart wrote the first book in English
with ‘political economy’ in the title, explaining that just as:
Economy in general [is] the art of providing for all the wants of a family, [so the science
of political oeconomy] seeks to secure a certain fund of subsistence for all the inhabitants,
to obviate every circumstance which may render it precarious; to provide every thing necessary
for supplying the wants of the society, and to employ the inhabitants … in such manner
as naturally to create reciprocal relations and dependencies between them, so as to supply
one another with reciprocal wants. The title page gave as its subject matter
“population, agriculture, trade, industry, money, coin, interest, circulation, banks,
exchange, public credit and taxes”. The philosopher Adam Smith defines the subject
as “an inquiry into the nature and causes of the wealth of nations,” in particular as:
a branch of the science of a statesman or legislator [with the twofold objective of
providing] a plentiful revenue or subsistence for the people … [and] to supply the state
or commonwealth with a revenue for the publick services.
J.-B. Say, distinguishing the subject from its public-policy uses, defines it as the
science of production, distribution, and consumption of wealth. On the satirical side, Thomas Carlyle
coined ‘the dismal science’ as an epithet for classical economics, in this context,
commonly linked to the pessimistic analysis of Malthus. John Stuart Mill defines the subject
in a social context as: The science which traces the laws of such
of the phenomena of society as arise from the combined operations of mankind for the
production of wealth, in so far as those phenomena are not modified by the pursuit of any other
object. Alfred Marshall provides a still widely cited
definition in his textbook Principles of Economics that extends analysis beyond wealth and from
the societal to the microeconomic level: Economics is a study of man in the ordinary
business of life. It enquires how he gets his income and how he uses it. Thus, it is
on the one side, the study of wealth and on the other and more important side, a part
of the study of man. Lionel Robbins developed implications of what
has been termed “[p]erhaps the most commonly accepted current definition of the subject”:
Economics is a science which studies human behaviour as a relationship between ends and
scarce means which have alternative uses. Robbins describes the definition as not classificatory
in “pick[ing] out certain kinds of behaviour” but rather analytical in “focus[ing] attention
on a particular aspect of behaviour, the form imposed by the influence of scarcity.”
Some subsequent comments criticized the definition as overly broad in failing to limit its subject
matter to analysis of markets. From the 1960s, however, such comments abated as the economic
theory of maximizing behavior and rational-choice modeling expanded the domain of the subject
to areas previously treated in other fields. There are other criticisms as well, such as
in scarcity not accounting for the macroeconomics of high unemployment.
Gary Becker, a contributor to the expansion of economics into new areas, describes the
approach he favors as “combin[ing the] assumptions of maximizing behavior, stable preferences,
and market equilibrium, used relentlessly and unflinchingly.” One commentary characterizes
the remark as making economics an approach rather than a subject matter but with great
specificity as to the “choice process and the type of social interaction that [such]
analysis involves.” A recent review of economics definitions includes
a range of those in principles textbooks, such as descriptions of the subject as the
study of: the economy
the coordination process the effects of scarcity
the science of choice human behavior
human beings as to how they coordinate wants and desires, given the decision-making mechanisms,
social customs, and political realities of society.
It concludes that the lack of agreement need not affect the subject-matter that the texts
treat. Among economists more generally, it argues that a particular definition presented
may reflect the direction toward which the author believes economics is evolving, or
should evolve. Notes References
Bye, Raymond T. “The Scope and Definition of Economics,” Journal of Political Economy,
47(5), pp. 623-47. Coase, Ronald H.. “Economics and Contiguous
Disciplines,” Journal of Legal Studies, 7(2), pp. 201-211.
Dow, Sheila C. Economic Methodology: An Inquiry, Oxford University Press. Description and review.

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