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ECONOMICS AS A SOCIAL SCIENCE

Economics is about society and it is about improving conditions for the economic upliftment of
people in a society. It seeks to measure well being of society. One example of such a measure of
human well being is the Human Development Index that ranks countries as developed, developing
or underdeveloped.

Two concepts we need to keep in mind are (1) resources available are limited and (2) man's desires
and needs are unlimited. Because of this, as individuals, communities and countries we have to
make decisions and choices. Economics is the study of these decisions and behaviours that leads to
findings and recommendation on how to better or more efficiently allocate resources at various
levels (individual, community, national and international).

Economics involves the generation, collection, study and analysis of both quantiative and qualitative
data about the social environment to arrive at trends, make predictions, and arrive at conclusions
that affect society.

In other words, one could also say that Economics is both a mathematical science and social
science. The objective of economics is to use mathematical observations, calculations and
reasonings to improve the welfare and wellbeing of society and in order to do so, an economist has
to also study the social environment and human behaviour.

Four definitions that define economics as a social science
1) "Economics is the social science which examines how people choose to use limited or scarce
resources in attempting to satisfy their unlimited wants."
2) Economics is the "study of how societies use scarce resources to produce valuable commodities
and distribute them among different people." Paul A. Samuelson, Economics (1948)
3) "Economics is a science which studies human behavior as a relationship between ends and scarce
means which have alternative uses." Lionell Robbins (1935).
4) "Thus it is on one side the study of wealth; and on the other, and more important side, a part of the
study of man."


Clexandrea D. Corpuz
IV - Bernoulli

RELATION OF ECONOMICS TO OTHER SCIENCES

History
History is related to economics in a number of ways. First, it provides economics with
the material that economists can then analyze. Secondly, history has itself been influenced
to a large extent by economic factors. Indeed, many wars, conflicts and revolutions came
about as a result of economic disputes. In addition, numerous inventions that shaped the
course of history where introduced to improve the economic condition of the inventor or
people in general.
Geography
Geography is another social science that is closely linked to economics. A favorable
geographic position is a large determinant of the prosperity of a nation. The primary factors
in a country's geographic position that determine its economic potential are proximity to
markets and abundance of available resources.
Political Science
Politics and economics come hand in hand. As John Maynard Keynes, a famous
economist, once observed, "Practical men, who believe themselves to be quite exempt from
any intellectual influence, are usually the slaves of some defunct economist." Economic
theories influence politics. For example, the ideas of economic liberalization pioneered by
Milton Freedman had a large influence on the policies of President Reagan. Political theories
also influence economics. For example, Adam Smith used many political ideas of John
Locke.

Philosophy
Philosophy and economics are so closely intertwined that it is sometimes impossible to
distinguish one from the other. For example, much of Karl Marx's writing can be categorized
as both economic and philosophical works. Another example is Milton Freedman. While he is
primarily regarded as an economist, a distinct libertarian philosophy plays a central role in all
his ideas.
Mathematics
Mathematics provides the tools that economists use. Particularly important are
algebra and calculus, as they allow economists to construct elaborate econometric models
that study the gross domestic product (GDP), employment, inflation and other
macroeconomic variables. Mathematics is also used in microeconomics, for example, to
calculate the optimal price of an economic good.