economics

Let us first start with what economics is not. Economics is not entirely the study of efficiency. It is also firstly, and primarily, the study of welfare of society.

Economics is not the study of money. That is accounting. Accountants are bean counters (and I'm gonna be one).

Economics is often split into two fields, microeconomics, and macroeconomics. Microeconomics try to deal with individual choices, and how these interact to affect variables like price. Macroeconomics deals with aggregates like GDP and aggregate demand.

Economics is only superficially the study of scarcity. It concerns itself about questions like government intervention, unemployment, inflation, levels of trade, and distribution of income. Through the study of economics we try to obtain the best possible choices for governments and individuals to make, to better our lives.

Economics was seen as the dismal science because of Rev. Malthus's predictions in the 19th century. His oft misquoted theory says that since population grows at a geometric rate (exponentially) and the means of production of food has grown at an arithmetic rate (linearly), there will be a time of great suffering in the future. The only way he saw through this problem was what he called "moral restraint" (stop buggering each other you rabbits), or "vice" (go to the brothel, where REAL contraception is used). He didn't forsee the changes in patterns of population growth, or that technological advances would also increase production exponentially.

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Economics long moved beyond utilitarian views. Melancholia's statements are rather unsupported, and only seem to seek to slag off economics. Ever heard of the Rowlesian Welfare function, O ye of narrow views?

The three main branches of economics currently popular in Western universities are Classical/Neo-classical, Keynesian, and Monetarist.

Classical economics refers primarily to work before the 20th century by people such as Adam Smith, David Ricardo, and Jean-Baptiste Say. Neo-classical economists like Irving Fisher have updated their work.

Keynesian economics derives from the work of John Maynard Keynes. Some other key Keynesians (no pun intended) include Roy Forbes Harrod and Sir John Richard Hicks.

Monetarists include the likes of Milton Friedman and Friedrich August von Hayek - although they have had various disputes with one another.

Economics is the social science of the production, consumption, and distribution of wealth.

Micro-economics focuses on economic agents (workers and consumers), firms, unions, and other institutions. Current schools/approaches in micro-economics include neo-classical, institutional, neo-institutional, game theory, experimental, computational, evolutionary, Marxist, feminist, Sraffian, and behavoural economics. These schools/approaches are not necessarily mutually exclusive.

Macro-economics focuses on economic aggregates and economy-wide variables such as inflation, economic growth, and unemployment. Schools of macro-economics include old Keynesian, monertarism, new classical, new Keynesian, and post-Keynesian economics. All macro-economic schools have their foundation in a theory of the micro-economy. The first four schools are rooted in neo-classical economics. Post-Keynesian economics is Keynesian economics built on an institutional/behavioral understanding of the micro-economy.

E2 isn't the place to put out a dry definition of macro or micro economics. E2 isn't for academia.

E2 is a place where you describe your colourful sense of things. Where you drop a bomb with your own personal stamp on it.

I am currently taking an undergraduate course in economics. The textbook being taught is aptly named Economics by one N. Gregory Mankiw. A standard really, taught in hundreds of schools. It's an updated version of his Ten Principles of Economics. Now, why they didn't keep the original title is a curious decision seeing as the first thing you read about are his Ten Principles of Economics. So far so good. But this is where I run into difficult ground. The version I am being taught is co-authored by Mark P. Taylor.¹ The idea being that the same version of economics can't be taught both sides of the Atlantic (what an a outlandish idea). In Europe there is the EU and the euro currency. In Britain they retained the pound, here in Iceland we have our króna. Belgians can't be expected to think in dollars and Mexicans don't give a dead donkey about ...say....slovenian euros - strike that - hungarian forints.

On the backside cover of Economics there are positive commentaries from teachers from England, Switzerland and Iceland. Wov, Iceland, you think but why...how come. They must really be casting their nets wide to include the Commercial College of Iceland. Weird huh?

So the Ten Principles are:

1. People Face Trade-Offs

2. The Cost of Something Is What You Give Up To Get It

3. Rational People Think At The Margins

4. People Respond To Incentives

5. Trade Can Make Everyone Better Off

6. Markets Are Usually a Good Way To Organize Economic Activity

7. Governments Can Sometimes Improve Market Outcomes

8. An Economy's Standard of Living Depends on Its Ability to Produce Goods and Services

9. Prices Rise When the Government Prints Too Much Money

10. Society Faces a Short-Run Trade-Off Between Inflation and Unemployment

If there's something I dislike then it's the feeling of study material being rammed down my throat. Therefore I immediately found faults with this textbook.

Modern textbooks are prepared, that is to say the layout, by satanic teams of psychologists. They decide what colors are user friendly as backgrounds and categorise information accordingly so you can be absolutely certain that you're reading a FYI (non-fictitious) and not a "Blast from the past" (fictitious) section. In Economics they've chosen the bewildering image theme of football to accompany the text. Each chapter begins with a football related picture. The first one being a snapshot of a coin being tossed by a referee, in a female football (that's soccer) match. I suppose the connections you're supposed to make are competition, girl power, prize, sweat, sex?

So I haven't (formally) studied any economics, though the subject seriously interests me. Discontent with the material presented with I picked up Robert L. Heilbroner's The Worldly Philosophers. It's subtitle is The Lives and Times of The Great Economic Thinkers and it's a rather entertaining read. But you don't learn economics reading it. You learn about economists mostly which I think is just as essential really. It puts things into perspective.

For a long time economics used to be political economy. Now, I am studying political science and a belief that keeps reinforcing itself, my steadfast belief is that, nothing has happened in a vacuum (the only possible place for a functioning free market). Historical perspective is probably the most underestimated, necessary premise for a successful education. (Regarding social sciences or economics)

It has been said here that everything2ians seem to have a socialist streak. I'm guilty as charged. I don't like people like Ayn Rand or Milton Friedman. Their false ideals of social betterment through selfishness simply don't register. Call me an outcast but first read what Ayn said in her article "What Is Capitalism?"² from way back in 1965.

The small minority of adults who are unable rather than unwilling to work, have to rely on voluntary charity; misfortune is not a claim to slave labor; there is no such thing as the right to consume, control and destroy those without whom one would be unable to survive. As to depressions and mass unemployment, they are not caused by the free market, but by government interference into the economy.

What a bitch! To her credit she does put in a couple of thoughtful words about forced agricultural reform and gulag slave labour with their millions of casualties, unforgivable, barbaric. But I don't aspire to be a USSR apologist. I am merely of the opinion that a free market can realistically be operated in a vacuum and nowhere else.

Seriously if the so-called civilised Western World lowered trade barriers and import/export controls via the USA proxy trade monoliths the consequences would be catastrophic. There would be a reconfiguration of the world economy ...... unthinkable ..... yeah.... be afraid.

References

1 - http://www.thomsonlearning.co.uk/mankiw_taylor
2 - published in Capitalism: The Unknown Ideal, a collection of essay (which a young Alan Greenspan contributes too interestingly)

E`co*nom"ics (?), n. [Gr. , equiv. to . See Economic.]

1.

The science of household affairs, or of domestic management.

2.

Political economy; the science of the utilities or the useful application of wealth or material resources. See Political economy, under Political.

"In politics and economics."

V. Knox.

 

© Webster 1913.