Economics and its scopes
What is economics?
Economics deals with the universal truth of human life that the wants of human life are unlimited and the resources to fulfill these needs are limited. Economics studies how man manages his limited product resources to produce goods and services to satisfy these unlimited wants like food, shelter clothes, and many more things. He wants all these things for his welfare, his progress, and even his very existence.
His wants are limitless but his resources to satisfy these needs are limited. Thus, the abundance of wants but scarce city of means to fulfill them drive him to engage in economic activities. The activities which help him to earn his living.
That is why every day and everywhere we see people engaged in several occupations. They all work because they have to earn their living. Thus, economics is a science of economic activities. The economics study that shows humans satisfy their wants and needs with limited available resources.
The word economics has been derived from the Greek words oiko (a house) and nomos meaning (to manage) which means managing a household using the limited available funds in the most economical manner possible. In the beginning, the term economics was used for a frugal use of one’s limited resources, and the term economy refers to how a particular society organizes its available resources for the maximum production of desired goods and services.
The science of economics in the present form, in which we study it today, though is just hardly three hundred years old, yet it has made so remarkable progress during this period, that it has left behind almost all the other social sciences and has been crowned as the “queen of social sciences” before we start the study of the principle of modern economics it will be better to explain its subject-matter i.eWhat we study in economics.
Every science or branch of knowledge is concerned with a particular subject, for instance, the science of physics deals with the properties of matter and energy. The science of chemistry deals with the construction and composition of matter. In biology, we study constituents and evaluation of living organisms. Political science studies the nature of state and government. The subject matter of economics has been variously defined by different economists from time to time.
This is partly because economics is a progressive social science. Over time, as much as new developments in different economic fields are taking place, they are being included and will continue in the re. With expanding the boundaries of its scope, its subject matter also expands. It is also in the process of growth and development.
Scope of economics
Scope means the field of study. Therefore, while discussing the nature and scope of economics we have to consider the following 4 aspects:
The subject-matter of economics
EconEconomicsa science and an art
Economics as a positive and normative science
Economics as a social science
Subject matter of economics:
Like the definition, the subject matter of economics is not free from controversy. According to Marshall and his followers, the subject matter of economics is the study of all those problems of economics that are related to the material welfare of man. The man who performs numerous economic activities as a member of society and not as an isolated person or an extraordinary individual like a hermit, a saint, or a person who has been cut off from society for any reason.
Economics as a science and an art:
Economics is a science as well as an. It is a science in a sense, it is systematic knowledge derived from scientific study, observation, and experiments based on inductive and deductive methodology. However, the degree of perfection of economic laws is less authentic compared with the law of pure science like physics, and chemistry.
The reason for economic laws is to be concerned with the man's life full of passion. Economics is art too because art is a system of rules for the attainment of a given end. Several branches of economics provide detailed guidance in the solution to economic problems.
Economics as a positive and normative science:
Economics is a positive and normative science. Being a positive science, it is a body of systematized knowledge that is concerned with the things as they are. It explains the causes and effects. Being a normative science, it deals with things as they ought to be; it evaluates things and possesses normal judgment.
All the leading economists of the past were of the view it was none of the functions of the economists to comment on the rightness or wrongness of an economic situation. However, the prominent economists of our times do not agree with the economists of the past on this point of view. We agree with the hawtray that economists cannot be dissociated from ethics. Economics is fundamentally a normative science not merely a positive science.
Economics as a Social Science:
Economics is defined by Marshal as the study of the ordinary business life of mankind. From this definition, it may be concluded that economics is the study of a man who lives in a society and shares in its joys and sorrows it doesn't study the man who lives all alone by himself.
Even in a society, the man is not studied individually the individual behaviour of the man of a society. For instance, the behavior of a hoarder, a black marketer, or a smuggler is not studied in economics. Economics to formulate economic laws observes the aggregate behavior of men like the consumer society of a particular commodity. All the laws of economics are based on actions of men taken only collectively. Thus, economics is a social science.
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