Editing Economics (section)

== Definitions of economics ==
{{anchor|The term and its various definitions€}}
{{main|Definitions of economics}}
The earlier term for the discipline was "political economy", but since the late 19th century, it has commonly been called "economics".<ref>{{Cite book |last=Backhouse |first=Roger |url=https://www.worldcat.org/oclc/59475581 |title=The Penguin history of economics |date=2002 |isbn=0-14-026042-0 |pages=117 |publisher=Penguin Adult |oclc=59475581}}</ref> The term is ultimately derived from [[Ancient Greek]] {{lang|grc|[[wikt:οἰκονομία|οἰκονομία]]}} (''oikonomia'') which is a term for the "way (nomos) to run a household (oikos)", or in other words the know-how of an {{lang|grc|οἰκονομικός}} (''oikonomikos''), or "household or homestead manager". Derived terms such as "economy" can therefore often mean "frugal" or "thrifty".<ref name="etymology">The terms derive ultimately from {{lang|grc|[[wikt:οἶκος|οἶκος]]}} (''{{lang|grc-Latn|oikos}}'' "house") and {{lang|grc|[[wikt:νόμος|νόμος]]}} (''{{lang|grc-Latn|nomos}}'', "custom" or "law"). {{Cite encyclopedia |last=Harper |first=Douglas |author-link=Douglas Harper |date=February 2007 |dictionary=Online Etymology Dictionary |title=Economy |url=http://www.etymonline.com/index.php?term=economic |access-date=27 October 2007 |archive-date=12 May 2013 |archive-url=https://web.archive.org/web/20130512162853/http://www.etymonline.com/index.php?term=economic |url-status=live }}</ref><ref name="Free2010">{{Cite book |url=https://books.google.com/books?id=hRFadIRMaMsC&pg=PA8 |title=21st Century Economics: A Reference Handbook |publisher=Sage Publications |year=2010 |isbn=978-1-4129-6142-4 |editor-last=Free |editor-first=Rhona C. |volume=1 |page=8}}</ref><ref name="MarshallMarshall1888">{{cite book |last1=Marshall |first1=Alfred |author-link1=Alfred Marshall |last2=Marshall |first2=Mary Paley |author-link2=Mary Paley Marshall |title=The Economics of Industry |url=https://archive.org/details/economicsindust00marsgoog |year=1888 |publisher=Macmillan |page=[https://archive.org/details/economicsindust00marsgoog/page/n22 2]|orig-year=1879}}</ref><ref name="Jevons1879">{{cite book |last=Jevons |first=William Stanley |author-link=William Stanley Jevons |title=The Theory of Political Economy |url=https://archive.org/details/theorypolitical00jevogoog |edition=2nd |year=1879 |publisher=Macmillan and Co |page=XIV}}</ref> By extension then, "political economy" was the way to manage a [[polis]] or state.

There are a variety of modern [[definitions of economics]]; some reflect evolving views of the subject or different views among economists.<ref name="Backhouse">{{cite encyclopedia |author-link1=Roger E. Backhouse |last1=Backhouse |first1=Roger E. |title=The New Palgrave Dictionary of Economics |pages=720–722 |first2=Steven |last2=Medema |date=2008 |edition=2nd|editor-first1=Steven N. |editor-last1=Durlauf |editor-first2=Lawrence E. |editor-last2=Blume |chapter-url=http://www.dictionaryofeconomics.com/article?id=pde2008_E000291 |doi=10.1057/9780230226203.0442 |isbn=978-0-333-78676-5 |chapter=Economics, definition of |publisher=Palgrave Macmillan UK |access-date=23 December 2011 |archive-date=5 October 2017 |archive-url=https://web.archive.org/web/20171005001939/http://www.dictionaryofeconomics.com/article?id=pde2008_E000291 |url-status=live }}</ref><ref name="BackhouseMedema2009">{{cite journal |last1=Backhouse |first1=Roger E. |first2=Steven |last2=Medema |date=Winter 2009 |title=Retrospectives: On the Definition of Economics |journal=[[Journal of Economic Perspectives]] |volume=23 |issue=1 |pages=221–233 |jstor=27648302 |doi=10.1257/jep.23.1.221|doi-access=free }}</ref> [[Scottish people|Scottish]] philosopher [[Adam Smith]] (1776) defined what was then called [[political economy]] as "an inquiry into the nature and causes of the wealth of nations", in particular as:

{{blockquote|text=a branch of the science of a statesman or legislator [with the twofold objectives of providing] a plentiful revenue or subsistence for the people&nbsp;... [and] to supply the state or commonwealth with a revenue for the publick services.<ref name="Groenwegen">{{cite book |last=Smith |first=Adam |author-link=Adam Smith |date=1776 |title=An Inquiry into the Nature and Causes of the Wealth of Nations|title-link=An Inquiry into the Nature and Causes of the Wealth of Nations }} and Book IV, as quoted in {{cite encyclopedia |first=Peter |last=Groenwegen |date=2008 |pages=476–480 |title=The New Palgrave Dictionary of Economics |edition=2nd |editor-first1=Steven N. |editor-last1=Durlauf |editor-first2=Lawrence E. |editor-last2=Blume |chapter-url=http://www.dictionaryofeconomics.com/article?id=pde2008_P000114 |doi=10.1057/9780230226203.1300 |chapter=Political Economy |publisher=Palgrave Macmillan UK |isbn=978-0-333-78676-5 |access-date=4 October 2017 |archive-date=5 October 2017 |archive-url=https://web.archive.org/web/20171005000524/http://www.dictionaryofeconomics.com/article?id=pde2008_P000114 |url-status=live }}</ref>}}

[[Jean-Baptiste Say]] (1803), distinguishing the subject matter from its [[public policy|public-policy]] uses, defined it as the science ''of'' production, distribution, and consumption of [[wealth]].<ref name="Say1803">{{cite book|last=Say|first=Jean Baptiste|author-link=Jean-Baptiste Say|title=A Treatise on Political Economy|year=1803|publisher=Grigg and Elliot|title-link=Say's Political Economy}}</ref> On the [[satirical]] side, [[Thomas Carlyle]] (1849) coined "[[the dismal science]]" as an [[Epithet#Alternative contemporary usage|epithet]] for [[classical economics]], in this context, commonly linked to the pessimistic analysis of [[Malthus]] (1798).<ref name="Dismal">{{unbulleted list citebundle
|1 = {{cite magazine |last=Carlyle |first=Thomas |author-link=Thomas Carlyle |date=1849 |title=Occasional Discourse on the Negro Question |magazine=[[Fraser's Magazine]] |title-link=Occasional Discourse on the Negro Question }}
|2 = {{cite book |last=Malthus |first=Thomas Robert |author-link=Thomas Robert Malthus |date=1798 |title=An Essay on the Principle of Population |publisher=J. Johnson |location=London|title-link=An Essay on the Principle of Population }}
|3 = {{cite journal |last=Persky |first=Joseph |date=Autumn 1990 |title=Retrospectives: A Dismal Romantic |journal=Journal of Economic Perspectives |volume=4 |issue=4 |pages=165–172 |jstor=1942728 |doi=10.1257/jep.4.4.165|doi-access= }}
}}</ref> [[John Stuart Mill]] (1844) delimited the subject matter further:

{{blockquote|text=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.<ref>{{cite book|last=Mill|first=John Stuart|author-link=John Stuart Mill|title=Essays on Some Unsettled Questions of Political Economy|chapter-url=https://books.google.com/books?id=4TxQqkP40fYC&pg=PA99|year=2007|publisher=Cosimo|isbn=978-1-60206-978-7|chapter=On the Definition of Political Economy; and on the Method of Investigation Proper to It|orig-year=1844|access-date=4 October 2017|archive-date=1 August 2020|archive-url=https://web.archive.org/web/20200801073208/https://books.google.com/books?id=4TxQqkP40fYC&pg=PA99|url-status=live}}</ref>}}

[[Alfred Marshall]] provided a still widely cited definition in his textbook ''[[Principles of Economics (Marshall)|Principles of Economics]]'' (1890) that extended analysis beyond [[Economic wealth|wealth]] and from the [[societal]] to the [[microeconomic]] level:

{{blockquote|text=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.<ref>{{cite book|last=Marshall|first=Alfred|author-link=Alfred Marshall|title=Principles of Economics|url=https://archive.org/details/principlesecono00marsgoog|year=1890|publisher=Macmillan and Company|pages=[https://archive.org/details/principlesecono00marsgoog/page/n196 1]–2}}</ref>}}

[[Lionel Robbins]] (1932) developed implications of what has been termed "[p]erhaps the most commonly accepted current definition of the subject":<ref name="BackhouseMedema2009"/>

{{blockquote |text=Economics is the science which studies [[human behaviour]] as a relationship between ends and scarce means which have alternative uses.<ref>{{cite book|last=Robbins|first=Lionel|title=An Essay on the Nature and Significance of Economic Science|url=https://books.google.com/books?id=nySoIkOgWQ4C&pg=PA15|year=2007|orig-year=1932|publisher=Ludwig von Mises Institute|isbn=978-1-61016-039-1|page=15}}</ref>}}

Robbins described 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]]."{{sfnp|Robbins|2007|p=16}} He affirmed that previous economists have usually centred their studies on the analysis of wealth: how wealth is created (production), distributed, and consumed; and how wealth can grow.{{sfnp|Robbins|2007|pp=4–7}} But he said that economics can be used to study other things, such as war, that are outside its usual focus. This is because war has as the goal winning it (as a sought-after ''end''), generates both cost and benefits; and, ''resources'' (human life and other costs) are used to attain the goal. If the war is not winnable or if the expected costs outweigh the benefits, the deciding ''actors'' (assuming they are rational) may never go to war (a ''decision'') but rather explore other alternatives. Economics cannot be defined as the science that studies wealth, war, crime, education, and any other field economic analysis can be applied to; but, as the science that studies a particular common aspect of each of those subjects (they all use scarce resources to attain a sought-after end).

Some subsequent comments criticised 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 behaviour and [[rational choice|rational-choice]] modelling [[Economic imperialism (economics)|expanded the domain]] of the subject to areas previously treated in other fields.<ref name="Backhouse2009Stigler">{{unbulleted list citebundle
|1 = {{cite journal |last1=Backhouse |first1=Roger E. |first2=Steven G. |last2=Medema |date=October 2009 |title=Defining Economics: The Long Road to Acceptance of the Robbins Definition |journal=Economica |volume=76 |issue=s1 |pages=805–820 |doi=10.1111/j.1468-0335.2009.00789.x|s2cid=148506444 |doi-access=free }}
|2 = {{cite journal |author-link=George J. Stigler |last=Stigler |first=George J. |date=1984 |title=Economics – The Imperial Science? |journal=Scandinavian Journal of Economics |volume=86 |issue=3 |pages=301–313 |jstor=3439864|doi=10.2307/3439864 }}
}}</ref> There are other criticisms as well, such as in scarcity not accounting for the [[macroeconomics]] of high unemployment.<ref>{{cite encyclopedia |author-link=Mark Blaug |last=Blaug |first=Mark |date=15 September 2017 |title=Economics |encyclopedia=Encyclopædia Britannica |url=https://www.britannica.com/topic/economics |access-date=4 October 2017 |archive-date=25 June 2022 |archive-url=https://web.archive.org/web/20220625153920/https://www.britannica.com/topic/economics |url-status=live }}</ref>

[[Gary Becker]], a contributor to the expansion of economics into new areas, described the approach he favoured as "combin[ing the] assumptions of maximizing behaviour, stable [[preference (economics)|preferences]], and [[economic equilibrium|market equilibrium]], used relentlessly and unflinchingly."<ref>{{cite book|last=Becker|first=Gary S.|title=The Economic Approach to Human Behavior|url=https://books.google.com/books?id=iwEOFKSKbMgC&pg=PA5|year=1976|publisher=University of Chicago Press|isbn=978-0-226-04112-4|page=5}}</ref> One commentary characterises 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." The same source reviews a range of definitions included in principles of economics textbooks and 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.<ref name=BackhouseMedema2009/>

Many economists including Nobel Prize winners [[James M. Buchanan]] and [[Ronald Coase]] reject the method-based definition of Robbins and continue to prefer definitions like those of Say, in terms of its subject matter.<ref name="Backhouse2009Stigler"/> [[Ha-Joon Chang]] has for example argued that the definition of Robbins would make economics very peculiar because all other sciences define themselves in terms of the area of inquiry or object of inquiry rather than the methodology. In the biology department, it is not said that all biology should be studied with DNA analysis. People study living organisms in many different ways, so some people will perform DNA analysis, others might analyse anatomy, and still others might build game theoretic models of animal behaviour. But they are all called biology because they all study living organisms. According to Ha Joon Chang, this view that the economy can and should be studied in only one way (for example by studying only rational choices), and going even one step further and basically redefining economics as a theory of everything, is peculiar.<ref>{{cite web |url=https://www.huffpost.com/entry/ha-joon-chang-economics_n_5120030 |title=Ha-Joon Chang: Economics Is A Political Argument |author=Seung-Yoon Lee |date=4 September 2014 |website=huffpost.com |publisher=Huffington Post |access-date= |quote= |archive-date=19 October 2021 |archive-url=https://web.archive.org/web/20211019151027/https://www.huffpost.com/entry/ha-joon-chang-economics_n_5120030 |url-status=live }}</ref>