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What is Economics?

No brief description can offer clear guidance to the content and character of economics—but numerous writers have attempted just that. An especially useless, though once popular, example is: «Economics is what economists do».

Similarly, a notable economist of the last century Alfred Marshall called economics «a study of mankind in the ordinary business of life». Another notable Lionel Robbins, in the 1930s, described economics as «the science of choice among scarce means to accomplish unlimited ends». (This «definition» has considerable currency still, though no one seems to know just what choices, if any, it might exclude from consideration!)

During much of modern history, especially in the nineteenth century, economics was called simply «the science of wealth». Less seriously, George Bernard Shaw was credited in the early 1900s with the witticism that «economics is the science whose practitioners, even if all were laid end to end, would not reach agreement».

We may make better progress by comparing economics with other subjects. Like every other discipline that attempts to explain observed facts (e.g., physics, astronomy, meteorology), economics comprises a vast collection of descriptive material organized around a central core of theoretical principles. The manner in which theoretical principles are formulated and used in applications varies greatly from one science to another. Like psychology, economics draws much of its theoretical core from intuition, casual observation, and «common knowledge about human nature». Like astronomy, economics is largely nonexperimental. Like meteorology (also largely nonexperimental), economics is relatively inexact, as is weather forecasting. Like particle physics and molecular biology, economics deals with an extraordinary array of closely interrelated phenomena (as do sociology and social psychology). Like such disciplines as art, fantasy writing, mathematics, metaphysics, cosmology, and the like, economics attracts different people for different reasons: «One person's meat is another person's poison». Though all disciplines differ, all are remarkably similar in one respect: all are meant to convey an interesting, persuasive (possibly entertaining), and intellectually satisfying story about selected aspects of experience. As Einstein once put it: «Science [one might add art] is the attempt to make the chaotic diversity of our sense-experience correspond to a logically uniform system of thought».

The scope of economics is indicated by the facts with which it deals. These consist mainly of data on output, income, employment, expenditure, interest rates, prices and related magnitudes associated with individual activities of production, consumption, transportation, and trade. Economics deals directly with only a tiny fraction of the whole spectrum of human behavior, and so the range of problems considered by economists is relatively narrow. Contrary to popular opinion, economics does not normally include such things as personal finance, ways to start a small business, etc.; in relation to everyday life, the economist is more like an astronomer than a weather forecaster, more like a physical chemist than a pharmacist, more like a professor of hydrodynamics than a plumber.

In principle, of course, almost any conceivable problem, from marriage, suicide, capital punishment, and religious observance to tooth brushing, drug abuse, extramarital affairs, and mall shopping, might serve (and, in the case of each of these examples has served) as an object for some economist's attention. There is, after all, no clear division between «economic» and «noneconomic» phenomena. In practice, however, economists have generally found it expedient to leave the physical and life sciences to those groups that first claimed them, though not always. In recent years economists have invaded territory once claimed exclusively by political scientists and sociologists, not to mention territories claimed by physical anthropologists, experimental psychologists, and paleontologists.