Definitions of economics

The term economics was originally known as "political economy". This term evolved from the French Mercantilist usage of {{lang|fr|économie politique}}, which expanded the notion of economy from the ancient Greek concept of household management to the national level, as the public administration of state affairs.

In 1770, Scottish economist Sir James Steuart wrote An Inquiry into the Principles of Political Economy, the first book in English with "political economy" in its title, describing it as:

: Economy in general [is] the art of providing for all the wants of a family, so the science of political economy seeks to secure a certain fund of subsistence for all the inhabitants, to obviate every circumstance which may render it precarious; to provide everything necessary for supplying the wants of the society, and to employ the inhabitants[...] in such manners naturally to create reciprocal relations and dependencies between them, so as to supply one another with reciprocal wants.{{cite book|last1=Steuart|first1=Sir James|title=An Inquiry into the Principles of Political Economy: Being an Essay on the Science of Domestic Policy in Free Nations, in which are Particularly Considered Population, Agriculture, Trade, Industry, Money, Coin, Interest, Circulation, Banks, Exchange, Public Credit, and Taxes|date=1770|publisher=James Williams and Richard Moncrieffe|url=https://books.google.com/books?id=M3RGAAAAYAAJ|language=en}}

The title page lists subjects including "population, agriculture, trade, industry, money, coins, interest, circulation, banks, exchange, public credit, and taxes".

In 1803, French economist Jean-Baptiste Say distinguished the subject from its public policy uses, defining it as the science of the production, distribution, and consumption of wealth.Say, Jean-Baptiste (1803 ). A Treatise on Political Economy; or the Production, Distribution, and Consumption of Wealth, trans. 1834, C. C. Biddle, ed., Grigg and Elliot. On the satirical side, Thomas Carlyle (1849) coined 'the dismal science' as an epithet for classical economics, a term often linked to the pessimistic analysis of Malthus (1798).• [Carlyle, Thomas] (1849). "Occasional Discourse on the N[egro] Question", Fraser's Magazine, republished in Works of Thomas Carlyle, 1904, v. 29, Charles Scribner's Sons, pp. 348–383.
   • Malthus, Thomas (1798). An Essay on the Principle of Population.
   • Persky, Joseph (1990). "Retrospectives: A Dismal Romantic", Journal of Economic Perspectives, 4(4), pp. 166–169 [pp. [https://www.jstor.org/stable/1942728 165]–172]. English philosopher John Stuart Mill (1844) defined the subject in a social context as:

: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.Mill, John Stuart (1844). "On the Definition of Political Economy; and on the Method of Investigation Proper to It", Essay V, in Essays on Some Unsettled Questions of Political Economy (V39). (Accessed Nov 2011)

The shift from the social to the individual level appears within the main works of the Marginal Revolution. Carl Menger's 1871 definition reflects the focus on the economizing man:

:For economic theory is concerned, not with practical rules for economic activity, but with the conditions under which men engage in provident activity directed to the satisfaction of their needs.Menger, Carl (1871). Principles of Economics, p. 48. [https://mises.org/sites/default/files/Principles%20of%20Economics_5.pdf].

William Stanley Jevons, another influential author of the Marginal Revolution, in 1871 defined economics as highlighting the hedonic and quantitative aspects of the science:

:In this work I have attempted to treat Economy as a Calculus of Pleasure and Pain, and have sketched out, almost irrespective of previous opinions, the form which the science, as it seems to me, must ultimately take. I have long thought that as it deals throughout with quantities, it must be a mathematical science in matter if not in language.Jevons, W. Stanley (1871). The Theory of Political Economy, Preface, pp. vi–vii.[http://library.mises.org/sites/default/files/The%20Theory%20of%20Political%20Economy_2.pdf]

Alfred Marshall provides a still widely cited definition in his textbook Principles of Economics (1890) that extends analysis beyond wealth and from the societal to the microeconomic level, creating a certain synthesis of the views of those still more sympathetic with the classical political economy (with social wealth focus) and those early adopters of the views expressed in the Marginal Revolution (with individual needs focus).

His inclusion of the expression wellbeing was also very significant to the discussion on the nature of economics:

:Political Economy or Economics is 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 use of the material requisites of well-being. Thus it is on the one side a study of wealth; and on the other, and more important side, a part of the study of man.Marshall, Alfred (1890 [1920]). Principles of Political Economy, v. 1, pp. 1–2 [8th ed.]. London: Macmillan.

Lionel Robbins (1932) developed implications of what has been termed "perhaps the most commonly accepted current definition of the subject":Backhouse, Roger E., and Steven Medema (2009). "Retrospectives: On the Definition of Economics", Journal of Economic Perspectives, 23(1), p. 225. [http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.1.221 221–233.]

:Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.Robbins, Lionel (1932). An Essay on the Nature and Significance of Economic Science, p. [https://books.google.com/books?id=nySoIkOgWQ4C&pg=PA15 15]. London: Macmillan. Links for [https://books.google.com/books?id=nySoIkOgWQ4C&pg=PR10 1932 HTML] and 2nd ed., [https://www.scribd.com/doc/14242989/An-Essay-on-the-Nature-and-Signicance-of-Economic-Science-Lionel-Robbins- 1935 facsimile].

Robbins describes 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".Robbins, Lionel (1932). An Essay on the Nature and Significance of Economic Science, p. [https://books.google.com/books?id=nySoIkOgWQ4C&pg=PA16 16].

Subsequent authors have sometimes criticized the definition as overly broad, in failing to limit its subject matter to analysis of markets. From the 1960s, these comments abated as the economic theory of maximizing behaviour and rational-choice modelling expanded the domain of the subject to areas previously treated in other fields.• Backhouse, Roger E., and Steven G. Medema (2009). "Defining Economics: The Long Road to Acceptance of the Robbins Definition", Economica, 76(302), [http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0335.2009.00789.x/full#ss4 V. Economics Spreads Its Wings]. [pp. [http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0335.2009.00789.x/full 805–820].]
   • Stigler, George J. (1984). "Economics—The Imperial Science?", Scandinavian Journal of Economics, 86(3), pp. [https://www.jstor.org/stable/3439864 301]–313. Another common criticism concerns scarcity not accounting for the macroeconomics of high unemployment.Blaug, Mark (2007). "The Social Sciences: Economics", The New Encyclopædia Britannica, v. 27, p. 343 [pp. 343–352].

Gary Becker, a contributor to the expansion of economics into new areas, describes the approach he favours as "combining the assumptions of maximizing behaviour, stable preferences, and market equilibrium, used relentlessly and unflinchingly".Becker, Gary S. (1976). The Economic Approach to Human Behavior, Chicago, [https://books.google.com/books?id=iwEOFKSKbMgC&pg=PA5=gbs_v2_summary_r p. 5]. One commentary characterizes 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".Backhouse, Roger E., and Steven Medema (2009). "Retrospectives: On the Definition of Economics", Journal of Economic Perspectives, 23(1), p. 229 [pp. [http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.1.221 221–33].

English economist John Neville Keynes in the early 20th century regarded the discussion leading up to the definition of economics more important than the definition itself.{{cite book |last=Keynes |first=John Neville |date=1917 |title=The Scope and Method of Political Economy |edition=4 |page=51 |publisher=Batoche Books |url= http://socserv2.socsci.mcmaster.ca/econ/ugcm/3ll3/keynesjn/Scope.pdf |archive-url= https://web.archive.org/web/20230921091244/https://socialsciences.mcmaster.ca/econ/ugcm/3ll3/keynesjn/Scope.pdf |archive-date=21 September 2023 |url-status=dead}} It would be a way to reveal the scope, direction and troubles the science faces.

A recent review of economics definitions from textbooks and other sources included describing the subject as the study of:

• the "economy"
• the coordination process
• the effects of scarcity
• the science of choice
• human behaviour
• human beings as to how they coordinate wants and desires, given the decision-making mechanisms, social customs, and political realities of society

It 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.Backhouse, Roger E., and Steven Medema (2009). "Retrospectives: On the Definition of Economics", Journal of Economic Perspectives, 23(1), Introduction and Conclusion [pp. [http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.1.221 221–233].

{{Reflist}}

• Bye, Raymond T. (1939) "The Scope and Definition of Economics", Journal of Political Economy, 47(5), pp. [https://www.jstor.org/stable/1824178 623]–647.
• Coase, Ronald H. (1978). "Economics and Contiguous Disciplines", Journal of Legal Studies, 7(2), pp. [https://web.archive.org/web/20130909053158/http://www.law.uchicago.edu/files/file/coase%20economics%20and%20contiguous%20disciplines.pdf 201–211].
• Dow, Sheila C. (2002) Economic Methodology: An Inquiry, Oxford University Press. [https://books.google.com/books?id=uLlzQgAACAAJ Description] and [http://www.acton.org/sites/v4.acton.org/files/pdf/7.2.582-585.REVIEW.Dow,%20Sheila,%20C.--Economic%20Methodology.pdf review]{{Dead link|date=January 2024 |bot=InternetArchiveBot |fix-attempted=yes }}.

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