Talk:Economics

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Former featured article Economics is a former featured article. Please see the links under Article milestones below for its original nomination page (for older articles, check the nomination archive) and why it was removed.
Main Page trophy This article appeared on Wikipedia's Main Page as Today's featured article on August 3, 2004.
          This article is of interest to the following WikiProjects:
WikiProject Economics (Rated B-class, Top-importance)
WikiProject icon This article is within the scope of WikiProject Economics, a collaborative effort to improve the coverage of Economics on Wikipedia. If you would like to participate, please visit the project page, where you can join the discussion and see a list of open tasks.
B-Class article B  This article has been rated as B-Class on the project's quality scale.
 Top  This article has been rated as Top-importance on the project's importance scale.
 
Wikipedia Version 1.0 Editorial Team / v0.5 / Vital / Core
WikiProject icon This article has been reviewed by the Version 1.0 Editorial Team.
Taskforce icon
This article has been selected for Version 0.5 and subsequent release versions of Wikipedia.


Updating definition of Economics[edit]

Below is a proposal to update the definition of economics. If economics is a social science it must study some aspect of human behavior. The proposed definition does not make any assumption of human behavior such as self interest, rationality or estable preferences. It only says it studies human behavior as a relationship between ends and scarce means, and that when the ends are value, behavior adopts the form of choice.

The definition in the article on economics is based on the one giving by Jean-Baptiste Say in his "Treatise on Political Economy or, The Production, Distribution, and Consumption of Wealth", published in 1803. But, as Lionel Robbings pointed out one hundred and thirty years later: "it follows from the very nature of a science that until it has reached a certain stage of development, [the right] definition of its scope is necessarily impossible."[1] Robbins thought that, by his time, the economic science "had become sufficiently unified for the identity of the problems underlying it various separate spheres of practical and philosophical enquiry to be detected"[2]; consequently, he wrote a hundred and sixty pages essay on "The Nature and Significance of Economic Science". After forty years of angry criticism and spirited discussions by his peers, his views became widely accepted by main stream economists.[3]

Say's approach was to define economics specifying certain areas of human activity. By implication, economics analyzes everything that goes on in those spheres. Nothing farther from the truth. Acconding to Robbings economics only analyzes certain aspects of production, distribution and consumption of wealth, "the form imposed by the influence of scarcity"[4]. It does not study production as a process or the different techniques to produce a thing; neither study management nor production problems.

Here is a simple example of an economic analysis applied to the airline industry as an illustration of a topic different than wealth. Safety is a big concern of everyone who flies or contemplates it. We are nineteen times safer in a plane than in a car, according to Arnold Barnett, MIT professor of statistics and an authority in the subject. In order to save lives, a safety proposal for airline carriers may be under consideration; but if the proposal increases airline ticket prices or multiplies air travel inconveniences, it may end costing more lives than it saves, if it pushes enough people onto the road. Therefore, the way people make choices on their travel options (economics) must be considered in any airline security proposal.

I present below the proposed definition based entirely on Robbins' for consideration and review of the Wikipedia public.

"Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses"[5]. First, economics studies public and private choices concerning the allocation of scarce resources to competing ends, because when ends are value, "behaviour necessarily assumes the form of choice".[6]. People and society busy themselves in solving the ever present problem or dilemma of choosing among alternate courses of actions and uses of their scarce resources, as choosing one alternative means foregoing another, what economist call opportunity cost. When people and society try to solve this problem they are economizing -going through a logical process of choosing among alternatives. This is the central issue in economics. And second, the allocation activity is a dynamic process changing and adjusting for every period according to the technical and social environment and the scarcity conditions of resources. Economics studies the successive series of allocation events as they move toward a steady state, what economists call equilibrium. Then, economics tries to discover the equilibrium conditions and evaluates the consequences and implications equilibrium has for the individual, for a segment of society and, in the aggregate, for society at large.

References supplied by Firulaith
References
  1. ^ Robbings, Lionel (1935). An Essay on the Nature and Significance of Economic Science. Great Britain: Macmillan and Co., Limited. p. 2. 
  2. ^ Robbings, p. 3
  3. ^ Defining Economics: the Long Road to Acceptance of the Robbins Definition, Roger E. Backhouse and Steven G. Medema, "Lionel Robbins’s essay on the Nature and Significance of Economic Science", 75th anniversary conference proceedings, p. 209; http://darp.lse.ac.uk/papersdb/LionelRobbinsConferenceProveedingsVolume.pdf
  4. ^ Robbings, Lionel (1935). An Essay on the Nature and Significance of Economic Science (Second ed.). Great Britain: Macmillan and Co., Limited. p. 17. 
  5. ^ Robbings, An Essay on the Nature and Significance of Economic Science (Second ed.) p.16
  6. ^ An Essay on the Nature and Significance of Economic Science (Second ed.) p. 14

Wikipedia articles do not represent our personal opinions, they are our best attempts to represent what the mainstream academics in the subject have published about the topic. -- TRPoD aka The Red Pen of Doom 03:28, 18 July 2014 (UTC)

What I am proposing is to use Lionel Robbins' definition instead of Jean-Baptiste Say's definition which has become obsolete. It has been long struggle, but Robbins's definition is now the most widely acepted by today mainstream economists (see Reference [1]). What I doing in this talk page is to persuade you and other wikipediam to accept it. Firulaith (talk) 00:14, 19 July 2014 (UTC)

Scarcity, value, choice, economizing, opportunity cost, and equilibrium are basic concepts of pure economic science. They are applied from an isolated man in a forgotten island, to the global economy with its intricate web of social, political, economic relationships. Pure economic science does not presuppose the existence of exchange, distribution, institutions, social relationships, or mode of production. A single isolated man in a forgotten island, as well as a patriarchal, medieval, capitalistic, or socialistic societies deal with those concepts on a daily basic. Firulaith (talk) 19:02, 18 July 2014 (UTC)

I'm following this discussion with interest. It reminds me of the last major rewrite of the article mathematics. There the mathematician's definition: mathematics is the method of deduction applied to precise definitions and axioms, lost out to the lay definition: the study of numbers and shapes. The definition of economics in this article is currently the lay definition. Will you succeed in replacing it with the economist's definition? If so, you need to render the economist's definition briefly and clearly, avoiding words such as "versatile", which I assume means that "your money or your life" is not an economic transaction. Rick Norwood (talk) 23:36, 18 July 2014 (UTC)

I have rewriten this proposal acconding to S. Rich (talk) and Rick Norwood|talk, advise. I made it shorter, with more references, and excluded what may be construe as "original work". — Preceding unsigned comment added by Firulaith (talkcontribs) 00:30, 19 July 2014 (UTC)

For Robbins's definition to be useful here, it needs to make sense to the lay person, and coincide with the way the word is commonly used. "Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses," raises several questions. 1) Is there any advantage to the word "human". Are humans the only animals to which economics can be applied? 2) Why must the means be scarce? Food is no longer scarce. America throws away enough food to feed all the hungry people in the world. Is understanding the waste of abundant resources not an economic question? 3) Must the means have alternative uses? If you (and only you) are drowning and I offer to sell you the only life jacket for $1000, is that not an economic transaction? But if we take out those three words, then all of sociology, psychology, and philosophy becomes economics. What I am asking is, why do those three restrictions, and not others, make behavior economic? Rick Norwood (talk) 11:30, 19 July 2014 (UTC)

You have raised excellent questions Rick. Economics is a social science, as such, it about human behavior not animal behavior for which, the logical process for choosing among alternatives is incipient or entirely guided on instincts and trial and error. Although humans have instincts and use the trial and error procedure extensible, they also value their options with personal and social considerations and choose, accordingly, with difficulty and uncertainly. If food is wasted in large quantities, the economic and political system is not doing a good job in allocating scarce resources. Scarcity means, that although we may have many things, we are not yet satisfied, we want more; even the richiest people want more. Scarcity would end when we can have all what we want of everything without sacrificing anything, or when we are totally content with what we have. Until that happens, scarcity reigns sovereign. An finally, means must have alternative uses, besides being accessible, otherwise there is no need to choose, and economic analysis is superfluous. Firulaith (talk) 16:52, 19 July 2014 (UTC)

Thank you for your reply. 1) Psychology is a social science, but we have the field of animal psychology. I'm not really raising an objection, just wondering if the word "human" adds anything to the sentence. 2) I see your point. 3) This is less clear to me. Even if the means, like the life jacket, have no alternative use, a person can still refuse to buy at a certain price, or refuse to sell at a certain price. I'm reminded of a friend of mine who collects old time radio. He met a US Army Sargent in Europe who had phonograph records of old time radio programs that were distributed to the troops during World War II. My friend offered the Sargent all the money he could afford for the records. The Sargent chose to break the records instead of selling them, though he would have sold them if my friend could have raised more money. Even when something has no alternative use, people sometimes refuse to sell. Is that not an economic decision? Rick Norwood (talk) 22:04, 19 July 2014 (UTC)

I had to think this for a while, Rick. If you are suggesting that the word “human” is understood, then it is fine to remove it. But if what you are implying is that economics may study human and non human behavior as well, we could be accused of “original work” by other wikipedians. The word history, for example, can ambiguously mean the geological history of the earth, a wikipidia article history, or the social science that study past “human” events. I would say that the word “human” clarify the sense the word “behavior” is used in the sentence.

As for your third point, you are talking about exchange. We all own property that can be exchanged in a market at a price. We are not seeking to sell most of them. For the ones we would sell, we have a reservation price, meaning the minimum price at which we would let them go. If nobody offers us at least our reservation price we won’t sell. The modern means to acquire property by exchange is money, which is both scarce and has alternative uses. As you say, the decision to sell or to buy is an economic one. We should consider those decisions as human economic behavior, which involves desired ends and limited resources capable of alternative application to obtain them. Firulaith (talk) 01:58, 21 July 2014 (UTC)

I think it is a bad idea to start wandering from the sources. we should hew close to what WP:UNDUE the general usages/definitions are.

  • "the science that deals with the production, distribution, and consumption of goods and services" [1]
  • "the social science concerned with the production and consumption of goods and services and the analysis of the commercial activities of a society"[2]
  • "The science that deals with the production, distribution, and consumption of commodities." [3]
  • "economics examines how people use their scarce resources to satisfy their unlimited wants" [4]
  • "the science that studies how people choose" [5]
  • "the study of a society's commercial activities in terms of the production , distribution and consumption of goods and services and how resources should be allocated." [6]
  • "economics is the study of scarce resources which have alternative uses" [7]

Good references. Too bad you forgot to sing your contribution. References 9, 10, and 11 are based on Say's definition whereas 12 (2014), 13 (2011), and 15 (2011) on Robbings'. Reference 14 (2006) are based on both. Say’s definition was fine, at his time, because, all classical economists, and Marx and Engels focused their attention on production, distribution, and consumption of wealth. When other economists made theoretical inroads in other areas of human knowledge, and their work was accepted as mainstream, then the Say’s definition became obsolete because, it left out main areas of economic theoretical inquires. Moreover, economics only analyzes certain aspects of production, distribution and consumption of wealth those falling under the influence of scarcity, which force people to choose and economize. Robbings' definition covers Say´s plus the left out areas.

I invite wikipidians to edit my proposed opening for the economic article or to say they are fine with the way the opening is. Firulaith (talk) 21:45, 21 July 2014 (UTC)

I have decided to rewrite the opening of the economics article as shown below. I leave it here for seven days, waiting for comments.

At the dawn as a social science, economics was defined and discussed at length as the study of production, distribution, and consumption of wealth by Jean-Baptiste Say in his "Treatise on Political Economy or, The Production, Distribution, and Consumption of Wealth" (1803). This definition has prevailed up to our time, save by substituting the word "wealth" for "goods and services" meaning that wealth may include non physical objects as well. One hundred and thirty years later, Lionel Robbings noticed that definition no longer sufficed,[1] because many economists were making theoretical and philosophical inroads in other areas of human activity. Then, he proposed a definition of economics as a study of a particular aspect of human activity, the one falling under the influence of scarcity,[2] which forces people to choose, allocate scarce resources to competing ends, and economize (seeking the welfare while avoiding the waste of scarce resources). For Robbings, the insufficiency was solved, and his definition allows us to proclaim, with an easy conscience, education economics, safety and security economics, health economics, war economics, and of course, production, distribution and consumption economics as valid subjects of the economic science.

Citing Robbings: "Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses".[3] After discussing it for decades, Robbings's definition became widely accepted by mainstream economists, and it has made its way into current textbooks.[4] Although far from unanimous, most mainstream economists would accept some version of Robbings' definition; even though, many have raised serious objections to the scope and method of economics, emanating from that definition.[5] Due to the lack of strong consensus, the old definition is still used by many quarters. Firulaith (talk) 06:00, 26 July 2014 (UTC)

Firulaith (talk) 02:06, 25 July 2014 (UTC)Firulaith (talk) 15:35, 25 July 2014 (UTC)

M&Ms says: Bravo! The opening is far superior to the previous version. Bravo, again! — Preceding unsigned comment added by 211.228.241.94 (talk) 03:57, 6 August 2014 (UTC)

The new opening is fine for the neoclassical economics article, or the neoclassical economics section of this article. It is not fine for the opening. This is an article about economics, meaning *all* of economics, not just neoclassical economics. It is a broad article, not a narrow article for just this one school of thought. The opening which sufficed for years is the better one. It would be like changing the opening of the religion article to talk about how religion is actually Christianity, because there are a lot of Christians in the world, and worshipping gods like Thor and Baal is a little out of date. I don't see anything wrong with what is written in the opening, the problem is it all belongs in section 8 under neoclassicism, which is where I am moving it.

Also, this is a tangential note, and not all that important for the matter at hand, but I have to laugh at One hundred and thirty years later, Lionel Robbings noticed that this definition no longer sufficed, because many economists were making theoretical and philosophical inroads in other areas of human activity. Then, he proposed a definition of economics as a study of a particular aspect of human behavior, the one that falls under the influence of scarcity, which forces people to choose, allocate scarce resources to competing ends, and economize (seeking the greatest welfare while avoiding the wasting of scarce resources). We're now living in an age where record companies, movie companies, book companies, software companies and a variety of other firms are pushing laws and lawsuits precisely because there is a lack of scarcity for a piece of intellectual property which can be duplicated millions of times and be distributed worldwide at the push of a button for next to no cost. The modern economy, and certainly the way it is headed in terms of capital investment, is one in which there is no elements of scarcity in the commodities produced, so perhaps times have changed so that the definition of "Lionel Robbings" (sic) also "no longer sufficed". Minimax Regret (talk) 03:12, 17 August 2014 (UTC)

You are right Minimax, Robbings's definition probably needs to be updated. It was written 82 years ago when there was no internet nor current advances of information technology. I only have exposed the Say's definition (the classical one) and the Robbings's definition, which I am not sure that it could be considered neoclassical[6]. The merit of Robbings's definition is to put scarcity as the central problem of economics. Without scarcity there is no need of the study of economics because there would be nothing to economize. We would be back to the garden of eden where we would be immortals and every thing we need and want we can get without any effort. Moreover, the absent of scarcity only means that there is not economic problem to solve, saved the legal ones concerning property rights. There have always been non-scarce free goods of nature, like the air we breathe, because, so little effort is needed to breathe that we do not even notice it. In the case of air, there are no legal problems because no one has appropriated the air yet. Surely, it would be wonderful if we could eliminate the scarcity of all goods and services and return to paradise by ourselves.
The classical definition points to a general area of ​​study while the Robbings's definition points to the central problem of economics without naming an area of ​​study, leaving it open. We should leave them both, because they complement each other.

Firulaith (talk) 20:39, 17 August 2014 (UTC)

Copyright problem removed[edit]

Prior content in this article duplicated one or more previously published sources. The material was copied from: The History of Economic Thought: A Reader, page 4 and History of Economic Thought: A Critical Perspective, page 3. Copied or closely paraphrased material has been rewritten or removed and must not be restored, unless it is duly released under a compatible license. (For more information, please see "using copyrighted works from others" if you are not the copyright holder of this material, or "donating copyrighted materials" if you are.) For legal reasons, we cannot accept copyrighted text or images borrowed from other web sites or published material; such additions will be deleted. Contributors may use copyrighted publications as a source of information, and according to fair use may copy sentences and phrases, provided they are included in quotation marks and referenced properly. The material may also be rewritten, but only if it does not infringe on the copyright of the original or plagiarize from that source. Therefore such paraphrased portions must provide their source. Please see our guideline on non-free text for how to properly implement limited quotations of copyrighted text. Wikipedia takes copyright violations very seriously, and persistent violators will be blocked from editing. While we appreciate contributions, we must require all contributors to understand and comply with these policies. Thank you. Diannaa (talk) 00:12, 25 July 2014 (UTC)

A quick fix[edit]

Someone needs to change social science in the first few words to social science. Thanks. 67.252.103.23 (talk) 22:57, 29 August 2014 (UTC)

Tiny out-of-place section needs to be deleted[edit]

Currently there is a highest-level section which in its entirety reads

Gross Domestic Product (GDP) or Economic Growth
Main article: Gross domestic product
Gross Domestic product means the total value of goods produced and services provided in a country in a year. GDP is customarily reported on annual basis.
GDP = C + I + G + (X - M)

This needs to be deleted.

  • The section title makes it sound like two non-synonyms are synonyms. And growth, which appears in the title, doesn't even appear in the section.
  • The title doesn't follow WP capitalization rules.
  • It's not relevant in an article about the discipline, as opposed to an article about the content of the discipline.
  • Even if relevant to this article, it would belong as a sub-section of the main section Macroeconomics rather than as a main section itself.

208.50.124.65 (talk) 18:01, 1 September 2014 (UTC)

Yes check.svg Done (by someone other than me.) EllenCT (talk) 04:00, 13 September 2014 (UTC)

Inequality[edit]

—2013 Economics Nobel prize winner Robert J. Shiller

I am going to add a section on inequality to this article. I don't know exactly what details yet, but it will summarize the material which is already in Economic inequality. I do not intend to add anything that isn't already in that article, and I will endeavor to add both sides of opposing arguments. I am posting here first to get people's suggestions and opinions if they wish to offer any beforehand. EllenCT (talk) 06:31, 15 September 2014 (UTC)

dlb[edit]

1. Full Employment 2. Stable Prices 3. Economic Growth 4. Balanced Budget 5. Balance-to-Payment Equilibrium — Preceding unsigned comment added by 150.216.63.185 (talk) 17:01, 18 September 2014 (UTC)

Semi-protected edit request on 17 December 2014[edit]

In the third paragraph under the Supply and Demand heading the sentence "That is, the higher the price of a product, the less of it people would be prepared to buy of it (other things unchanged)." should say "That is, the higher the price of a product, the less of it people would be prepared to buy (other things unchanged)." Jbuttenshaw (talk) 23:05, 17 December 2014 (UTC)

Yes check.svg Done Thanks for pointing that out - Arjayay (talk) 08:58, 18 December 2014 (UTC)

  1. ^ "And when we submit the definition in question to this test, it is seen to possess deficiencies which, so far from being marginal and subsidiary, amount to nothing less than a complete failure to exhibit either the scope or the significance of the most central generalisations of all." Robbings, Lionel (1935). "An Essay on the Nature and Significance of Economic Science". Great Britain: Macmillan and Co., Limited. p. 5.
  2. ^ "The conception we have adopted may be described as analytical. It does not attempt to pick out certain kinds of behaviour, but focuses attention on a particular aspect of behaviour, the form imposed by the influence of scarcity. Robbings ibid, p. 17.
  3. ^ Robbings ibid, p. 16
  4. ^ Defining Economics: the Long Road to Acceptance of the Robbins Definition, Roger E. Backhouse and Steven G. Medema, "Lionel Robbins’s essay on the Nature and Significance of Economic Science", 75th anniversary conference proceedings, p. 215; http://darp.lse.ac.uk/papersdb/LionelRobbinsConferenceProveedingsVolume.pdf
  5. ^ "There remained division over whether economics was defined by a method or a subject matter but both sides in that debate could increasingly accept some version of the Robbins definition". Roger E. Backhouse and Steven G. Medema, ibid, p. 223
  6. ^ Robbings does not make any references to the neoclassicals's assumptions nor mentioned any marginal analysis, and the moderm concept of scarcity as used by Robbins was explicity recognized in the work of Ferdinando Galiani in 1751, one hundred and twenty years before the major works of the neoclassicals.