Saturday, August 18, 2007

Economics isn't just about money

I hate it when people narrow the definition of the word "economics" to being just about wealth or money. I just deleted someone from my blog favorites because he went on a rant about economics and he doesn't even understand the word! Although, this guy also refers to himself as an "almost-PhD" because he's completed all the work except for the dissertation. huh?

So then I looked up "economics" on, where they list 7 different source definitions, all having to do with money. Wikipedia even started with those same definitions. Good lord, no wonder everyone thinks that's what it's about.

For the record, I'm not one of those people who compares economics to the sciences. My undergraduate degree is in economics, and I don't go around referring to myself as a scientist.

One of my dear professors explained it this way: Economics is everything, and everything is economics. That is the definition.

Economics is a study of human behavior, an explanation of how we make decisions. Economics deals in values, not dollars. Economics has been accused of valuing all things equally and therefore being flawed; that is false. Economics allows for "values" to be different things to different people, to be different at different moments.

One definition is that economics is a study in how people satisfy unlimited wants with limited resources. That is reasonable if you understand that resources are not necessarily part of the GNP. If I am trying to decide whether to eat cake or pie or both, I make my decision either consciously or unconsciously by deciding which scenario would give me the most pleasure, or the least displeasure at this time. I value the time it will take me to eat, the amount of room I have in my stomach, the imagined taste of the pie or cake, and many other factors that have nothing to do with the cash in my wallet. I unconsciously use economics to make this decision, and it all happens in a manner of seconds.

I am hoping that recent highly-publicized books like Freakonomics and Discover Your Inner Economist will start to open more eyes about the broadness of economics.

1 comment:

Vonnie said...

I have an undergrad degree in economics too! It's a BA degree in Canada, not BSc, so I'm definitely not a scientist :)


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