DEFINITIONS OF ECONOMICS

 The word economics has been derived from the Greek word “OIKONOMICAS” with “OIKOS” meaning a household and “NOMOS” meaning management. It is understood that the beginning was made by the Greek Philosopher, Aristotle who in his book “Economica” focused that the field of economics deals with household management.

The concepts on which various definitions of economics given are

1) Wealth

2) Welfare

3) Scarcity

4) Growth

‘Wealth’ Definition of Economics

Adam Smith (1776) who is regarded as “Father of Economics” in his book entitled “Wealth of Nations” defined economics as “An enquiry into the nature and causes of the wealth of nations”.

‘Welfare’ Definition of Economics

Alfred Marshall defined economics as “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 material requisites of wellbeing”.

‘Scarcity’ Definition of Economics

“Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses” according to Robbins.

‘Growth’ Definition of Economics

Keynes defined economics as “The study of the administration of scarce resources and of the determinants of employment and income.

Economics - a Social Science

Economics studies human beings as members of society participating in economic activities. It does not study humans as isolated individuals. He is interdependent. Thus economics is a social science.

Is Economics a Science or an Art?

By definition, science is a systematized body of knowledge having an empirical correspondence. Analogous to science, art is also a systematized body of knowledge. It directs through a system of procedures to attain a given objective or goal it tells us how to do a thing.

Treating economics as a science, a given theory is formed through the conduct of experiments, recording observations, analysis of data recorded, drawing conclusions, and finally testing them. In economics also the same procedure is followed to present any principle or theory. Hence economics is as good as any science.

As an art, economics shows solutions to the problems. It helps us how to do a thing. The role of economics as an art can be found in any sphere of economic activity. For example, it advocates how to maximize the profits of a firm given the resource constraints. Given a problem, the field of economics guides us to solve the same. Thus, the field of economics has the attributes of science and art. Economics, therefore, is a science as well as an art.

Economics –Positive Science or Normative-Science.

In economic theory, we make an effort to explain the nature of the economic activity and predict the events in the economy as facts change. Such an effort helps us to know the environment in which we live and what part is related to others and what causes what.

Positive economics is completely objective and is limited to the cause and effect relationship of economic activity. It is simply concerned with the way the economic relationships are present in different economic activities (what they are).

Normative economics studies the way that economic relations ought to be. Normative economics evaluates. Policymaking, a conscious intervention in the economy for the welfare of the people is essentially a normative in character.