Essay on “Economics” (770 Words)

To get resources to satisfy wants, one has to work. Individuals will make efforts to earn income and fulfill the needs. In this manner wants give rise to efforts and efforts lead to satisfaction. Thus, wants, efforts and satisfaction constitute the nucleus of our study.

Economics:

The word ‘Economics’ is very popular today. It is originally derived from the two Greek words ‘Oikos’ which means household and ‘Nemein’ which means management.

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Thus, it refers to managing of a household or a family using the limited funds. But such a description of Economics, as a subject is no longer useful as its scope has gone beyond the limits of a family.

However, economics as a separate science or a discipline was born with the publication of Adam Smith’s book “An Enquiry into the Nature and Causes of Wealth of Nations” in 1776.

Adam Smith made a systematic analysis of the subject and clearly defined its scope. In view of this contribution, Adam Smith is considered as the father of economics.

Economy:

We know that, there are various factories, farms, mines, offices, shops, transport system; railways etc. are all around us. All these institutions and establishments help people to earn income. In other words, these institutions help to produce goods and services which directly or indirectly satisfy human wants.

All these institutions and organizations may be collectively called on ‘Economy’. Thus, “A total system comprising farms, factories, mines, shops, roads, railways, offices, schools, colleges, hospitals etc. are all looked upon as growing institutions which provide various types of goods and services to the people. This is called an economy.”

Definition of Economics:

From the definition, we can have a clear understanding about the nature and scope of the subject.

According to Aristotle,

“A definition is a phrase signifying a things essence.”

So far economics is concerned; it is a dynamic, scientific, practical and evolving subject.

Economics as a social science has been defined differently by many economists at different times. There is no unanimity of opinion among economists regarding the definition of economics.

However, the definition of Economics has been modified from time to time depending upon the scope covered and inclusion of various human motives. Some of the important ones will be studied and reviewed here, so that the concept of Economics becomes more clear to the learners.

Mr. JACOB VINER described Economics in very simple words by saying,

“Economics is what economist does.”

A lot can be discussed on this simple but vague definition, as it leads directly to the study of the subject covered by economists and the methods used by them.

But this definition also suggests that the scope of subject changes in accordance to the range of activities, considered by the economists. However, this definition is inadequate and incomplete as it does not give a clear understanding of the fundamental concept of economics.

In the earlier periods, the desire to earn money and accumulation of wealth was considered to be the primary motive, which subsequently changed to welfare of the society. With the economic development’, the scarcity and then the growth was considered to be primary motives of economics.

The definition of Economics was also modified accordingly, but none of the definitions is complete in itself. The plethora of various definitions is that there is no unanimity.

Thus, these definitions can be divided in the following categories depending upon various inherent motives:

(1) Wealth-oriented definition (Adam Smith, J. S. Mill, F. A. Walker).

(2) Welfare-oriented definition (Marshall, Pigou, Cannan)

(3) Scarcity-oriented definition (Robbins, Keynes)

(4) Growth-oriented definition (Samuelson).

The study of all above definitions will give an idea to the readers about the progress of economic development also, because a modification in definition and fundamental concept directly reflects as to what was the economic approach prevailing at that time which led to the modification in the definition itself.

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