Proper definition of economics
From Wikinfo
The proper definition of economics provides clarity from the various conflicting and confusing definitions of the subject of economics.
Economics derives from the Greek οίκος [oikos], 'family, household, estate, habitat', and νομος [nomos], 'custom, law', hence "household management" and "management of the state". (Hence also ecology.)
The proper definition of economics is:
Quote:
- Economics in a narrow sense puts the approach, methods and tools, of the discipline central, and looks at a variety of subjects.
- Political economy puts the subject, the management of the state, central.
- Economics in a broad sense joins the �narrow sense� and Political Economy.
One way to view these distinctions is to visualize a matrix with the sciences in the rows and the subjects in the columns. The common economist may to some extent neglect the inputs of the other disciplines, but the political economist must draw on the resources of philosophy, history, law, sociology, politicology, social psychology, biology, physics and so on. Political Economy is, just by definition, the study that tries to integrate all human knowledge about the management of the state. Political Economy is, in that respect, the proper continuation of ancient philosophy on that subject matter.
Unquote
Quoted from Colignatus in "Definition & Reality in the General Theory of Political Economy"
Historical note
The distinction between economics and political economy is commonly seen as the distinction between microeconomics and macroeconomics. The latter distinction between micro and macro was introduced by Piet de Wolff, Income Elasticity of Demand, A Micro-Economic and a Macro-Economic Interpretation, The Economic Journal, 1941, p140-146, which author later became director of the Dutch Central Planning Bureau as a successor to Jan Tinbergen. However, it is generally recognized that good macro-economics must have proper basics in micro-economics, so that this distinction only concerns a shift in focus rather than a distinction in subject. The effect of the terms micro and macro was rather that many economists considered that only macro-economics was science, with political economy belonging to another realm. This was an unfortunate reaction, since political economy is a science as well, so that the true distinction lies elsewhere. The proper view would be to use the terms micro and macro only with respect to the aggregation problem, as Piet de Wolff originally stated it. To understand the evolution of macro-economic variables, it is important to understand their dependence upon economic policy, and to understand how that policy comes about. Modern political economy unifies the General Theory by John Maynard Keynes with the notion that the State uses information in its management. As economic policy making is guided by economic theories, and as these theories or applications can be inoptimal or manipulated, there arises a General Theory of Political economy, that can explain phenomena such as Stagflation.
Links
- for nomos, see http://www.bible-researcher.com/hebraisms.html: "One example is the Greek word nomos, which is usually translated "law." In Greek the basic meaning of nomos is "custom" or "convention," for the Greeks held that law was simply codified custom."
- for oikos, see http://www.oup.co.uk/isbn/0-19-815025-3: "The Oeconomicus is unique in Greek literature in combining a discussion of the proper management of an oikos (`family', `household', or `estate') and didactic material on agriculture within a Socratic dialogue."
