Definition of Economics

Key Points

• Economics: Social science that studies society, especially in the context of resource use.
• Term 'Economics': Comes from the Greek word 'Oikonomia,' meaning 'household management.'
• Main function of Economics: Managing resources and understanding how to use them efficiently.

Adam Smith's Definition

• Adam Smith is called the 'Father of Economics.'
• His Book: 'An Inquiry into the Nature and Causes of the Wealth of Nations.'
• Economics is viewed as 'Wealth of Nations,' meaning it studies how national wealth is generated and how it can be increased.

Characteristics of Adam Smith's Definition

• Study of Wealth: What is wealth and how can it be accumulated.
• Causes of Wealth: Studying where wealth comes from.
• Economic Man: Viewing individuals as 'Economic Man' who constantly think about accumulating wealth.

Criticism

• Excessive emphasis on wealth: Viewing everything from the perspective of wealth.
• Ignoring higher values of life: Overlooking other important aspects of life such as love, happiness, and social relationships.
• Neglecting non-material things: Ignoring services and other intangible aspects.

Alfred Marshall's Definition

• Economics is considered the study of man's ordinary business of life.
• Emphasis on human and economic activities: Attempting to explain how people manage their economic activities.

Characteristics of Marshall's Definition

• Human-centered: Placing humanity at the core of economics.
• Study of ordinary business: Analyzing everyday economic activities.
• Emphasis on material wealth: Focusing solely on material wealth.

Criticism

• Limiting economics: Restricting it only to material wealth.
• Ignoring non-material things: Neglecting services and other intangible aspects.

Professor Robbins's Definition

• Economics is the study of 'scarcity of resources and unlimited wants.'
• Scarcity: Analyzing problems arising from limited resources.
• Unlimited wants: Studying the infinite needs of humans.

Characteristics of Robbins's Definition

• Logical explanation: Logical analysis of economic problems.
• Universal problem: Applicable everywhere and all the time.
• Human science: Recognizing economics as a human science.

Criticism

• Positive science: Focusing only on 'what is' and not on 'what should be.'
• Limited perspective: Not including the changing conditions over time.

Microeconomics and Macroeconomics

• Microeconomics: Study of smaller units, such as individuals, firms, and their economic activities.
• Macroeconomics: Study of the entire economy, such as national income, Gross Domestic Product (GDP).

Difference between Micro and Macro

• Microeconomics: Analyzing the behavior of individuals and firms.
• Macroeconomics: Analyzing national economic activities.

Interdependence

• Both Micro and Macro are interdependent.
• The behavior of individual firms and the analysis of national income affect each other.

Conclusion

• Economics: A broad and complex subject that studies humanity and resource management.
• Various definitions: Different scholars have viewed and defined it from various perspectives.
• Contemporary: With changing times, definitions and perspectives of economics also continue to evolve.