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Saturday, June 17, 2017

What is economics?


Photo source: Wikimedia Commons, AndrewHorne


What is economics? Here is my definition:


Economics is the study of the production, distribution and consumption of goods and services.


In other words, economics is the study of the economy.


This post is a collection definitions for 'economics' from famous economists. I have divided the definitions into four categories: scarcity, wealth, decision-making and open-ended. This post was inspired by Roger Backhouse and Steven Medema's paper 'On the Definition of Economics'.


For each definition, I have provided a short analysis. There are 17 definitions below.


Wealth based definitions


Adam Smith (1723-1790)

"[Economics is] the nature and causes of the wealth of nations." (The Wealth of Nations, 1776)



Jean-Baptiste Say (1767-1832)

"[Political economy is] the science of production, distribution and consumption of wealth." (A Treatise on Political Economy, 1803)



John Stuart Mill (1806-1873)

"[Political economy] is 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." (On the definition of Political Economy, 1867)



Thomas Adams (1873-1933), Richard Ely (1854-1943), Max Lorenz (1876-1959) and Allyn Young (1876-1929)

"[Economics is] the wealth-getting and wealth-using activities of man." (Outlines of Economics 4th edition, 1926)



Scarcity based definitions


Lionel Robbins (1898-1984)

"[Economics is] the science which studies human behavior as a relationship between ends and scarce means which have alternative uses." (Essay on the Nature and Significance of Economic Science, 1932)



George Stigler (1911-1991)

"[Economics is] the study of the principles governing the allocation of scarce resources among competing ends when the objective of the allocation is to maximize the attainment of the ends." (The Theory of Competitive Price, 1942)



Milton Friedman (1912-2006)

"[Economics is] the science of how a particular society solves its economic problems... an economic problem exists whenever scarce means are used to satisfy alternative ends." (Price Theory: A Provisional Text, 1962)



Paul Samuelson (1915-2009)

"Economics is the study of how people and society end up choosing with or without the use of money to employ scarce productive resources that could have alternative uses, to produce various commodities and distribute them for consumption, now or in the future, among various persons and groups in society. It analyzes the costs and benefits of improving patterns of resource allocation." (Economics 10th edition, 1976)



Gary Becker (1930-2014)

"[Economics is] the study of allocation of scarce means to satisfy competing ends." (Economic Theory, 1971)



Robin Bade and Michael Parkin

"[Economics is the] social science that studies the choices that individual, business, government and entire societies make as they cope with scarcity." (Foundations of Microeconomics, 2002)



Decision-making based definitions


Carl Menger (1840-1921)

"[Economics] is related to the practical activities of economizing men." (Principles of Economics, 1871)



Alfred Marshall (1842-1924)

"Political economy or economics is a study of mankind in the ordinary business of life. It examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing... thus it is on the one side a study of wealth and on the other, and more important side, a part of the study of man." (Principles of Political Economy, 1890)



Summer Slichter (1892-1959)

"The subject matter of economics is industry; the process by which men get a living... economics studies industry, not as a technological process, but as a complex of human practices and relationships." (Modern Economic Society, 1931)



James M. Buchanan (1919-2013)

"[Economics is] the study of the whole system of exchange relationships."



David Colander (1947-now)

"Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs and political realities of the society." (Microeconomics 6th edition, 2006)



Greg Mankiw (1958-now)

"Economics is the study of how society manages its resources." (Principles of Economics 2nd edition, 2001)



James Gwartney, David MacPherson, Russell Sobel and Richard Stroup

"Economics is the study of human behavior with a particular focus on human decision-making." (Microeconomics: Private and Public Choice 11th edtion, 2006)





Jacob Viner (1892-1970)

"Economics is what economists do." (Quoted by Kenneth Boulding in Economic Analysis, 1941)