Economics : Definition and Nature
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Economics : Definition and Nature

What is Economics? What is its nature?

Economics is the proper allocation and efficient use of available resources for the maximum satisfaction of human wants. Since resources are generally scarce while human wants tend to be unlimited, economics encounters not a few problems. However, the biggest problem is not limited resources like land, money, machines, raw materials, technology, skilled workers, or competent managers. The root problem, which is the real problem, is the unjust distribiution of productive resources among the members of the society. Such maldistribution of wealth and income is the root cause of poverty. Our available resources are in the hands of very few families. So, most of the people are mere tenants, clerks, factory workers and servants. 

Nature of Economics 

Economics is classified as a social science because it deals with the study of man's life and how he lives with other men. Obviously, economics is interdependent, with other sciences like sociology, political science, history, geography and physics. In fact, it is even affected by religion. For example, a jobless man is likely to create a social crime like stealing. The policies of the government influence economic activities. The geography of a region determines the main sources of incomes of the people, like fishing or farming. The solution of economic problems or economic planning may rely on past events or historical developments. In the case of physics, it produces machines and electricity. These are very useful in the production of goods and services. Likewise, religion is realted to economics. Religious traditions and beliefs can discourage or encourage economic development.

Considering the nature of economics, it is not advisable to solve an economic problem with economic solution alone. This can not solve the economic problem. Our economic problems are not purely economic in nature. These are also created by non-economic factors like culture, education, social and political. Therefore, to solve completely or minimize an economic problem, we need not only economic solutions but also political, social and cultural reforms. For example, a poor farmer has several bad habits like heavy drinking and gambling. He has remained very poor because he is just a tenant, and he spends his little income mostly on his vices. Giving the poor famer a land of his own does not automatically improve his economic condition. If he does not know how to use properly his income, and the middleman gets most of the fruits of production of the farmer, then the economic problem of the farmer has not been solved.

Thanks for reading this article! More articles coming soon! :) 

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Comments (2)

I have been teaching agricultural economics and I think you have defined and explained the term "economics" so well. Voted up!

Thanks for the complement. :)