Economics2

Economics2

Economics Economics can be defined in two ways, in terms of scarcity or material welfare. An example of the first is Lord Robbins's 'Economics is the science which studies human behaviour as a relation between ends and scarce means which have alternative uses.' An example of the second is Alfred Marshall's 'Economics 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 well-being.'

The scarcity definition relates economics not to any particular kind of human activity but an aspect of all activity that of scarcity and choice. This clearly separates 'economic' from 'technical', 'historical', 'political' or other aspects. The problem of how best to build a house with given resources is technical; the problem of choosing the best combination of differently priced resources to build a house, or the problem of allocating given building resources between a farmhouse, barns and cattle-sheds are economic, since they require choice between alternatives.

One field of study undertaken by economists, and expressly excluded from the scope of economics by the scarcity definition, is that of welfare economics the study of the economic conditions under which the economic welfare of a community might be maximized. Such study necessarily involves comparisons between the economic welfares of individuals, as, for example, in considering the economic desirability of policies that will bring economic gain to some people but economic loss to others. This kind of analysts is 'normative', i.e. it requires the use of standards or norms relating to 'what ought to be', rather than 'positive', 'behaviourist' and neutral, i.e. requiring only analysis of 'what is'. At some point in the course of welfare economic analysis, ethical judgments ('value judgments') about these norms must be imported from 'outside'. It can thus be argued that such studies He outside the proper scope of 'pure' economic science, rather as astrology lies outside the field of pure astronomy, without at the same time denying that they may be of use in relation to economic policy. Although the scarcity type of definition would seem to confine economics to scientific propositions of a positive nature, the distinction between positive and normative is not always easy to draw in practice. The great value of the scarcity definition is that it indicates the essence of economics, whereas the material wealth type of definition tends to exclude rather arbitrarily many kinds of activity that have an economic aspect.

You could be interested in International Economic - International Economics Krugman


consumeraffairs.org.uk

Since then his writings have in turn been increasingly reinterpreted as a special case both by some followers and by some economists who had not wholly accepted his writings. The content of economics is in a state of change, and this consumeraffairs.org.uk site is therefore not a final statement of economic doctrine.

Economics is in the last resort a technique of thinking. The reader will therefore need to make an intellectual effort, more substantial for some web entries than for others, to get the most interest and value out of this website.