De Guzman, Rizza Jane

Malaluan, Angeline Mae

Plata, Korinne Mae

ECONOMICS

Introduction

The word 'economics' comes from two Greek words, 'eco' meaning home and 'nomos'
meaning accounts. The subject has developed from being about how to keep the family
accounts into the wide-ranging subject of today. Economics is a social science concerned with
the production, distribution, and consumption of goods and services. It studies how individuals,
businesses, governments, and nations make choices on allocating resources to satisfy their
wants and needs, trying to determine how these groups should organize and coordinate efforts
to achieve maximum output. One of the earliest recorded economic thinkers was the 8th-century
BC Greek farmer/poet Hesiod, who wrote that labor, materials, and time needed to be allocated
efficiently to overcome scarcity. But the founding of modern Western economics occurred much
later, generally credited to the publication of Scottish philosopher Adam Smith's 1776 book, An
Inquiry Into the Nature and Causes of the Wealth of Nations. Economics ranges from the very
small to the very large. The study of individual decisions is called microeconomics. The study of
the economy as a whole is called macroeconomics. A microeconomist might focus on families’
medical debt, whereas a macroeconomist might focus on sovereign debt.
The principle and problem of economics is that human beings have unlimited wants and occupy
a world of limited means. For this reason, the concepts of efficiency and productivity are held
paramount by economists. Increased productivity and a more efficient use of resources, they
argue, could lead to a higher standard of living. Despite this view, economics has been
pejoratively known as the "dismal science," a term coined by Scottish historian Thomas Carlyle
in 1849. He used it to criticize the liberal views on race and social equality of contemporary
economists like John Stuart Mill, though some sources suggest Carlyle was actually describing
the gloomy predictions by Thomas Robert Malthus that population growth would always outstrip
the food supply. Economics is especially concerned with efficiency in production and exchange
and uses models and assumptions to understand how to create incentives and policies that will
maximize efficiency.

Role of Philosophy
 Philosophers are not empirical researchers, and on the whole they are not formal theory-
builders. So what constructive role does philosophy have to play in economics? There are
several. First, philosophers are well prepared to examine the logical and rational features of an
empirical discipline. How do theoretical claims in the discipline relate to empirical evidence?
How do pragmatic features of theories such as simplicity, ease of computation, and the like,
play a role in the rational appraisal of a theory? How do presuppositions and traditions of
research serve to structure the forward development of the theories and hypotheses of the
discipline? Second, philosophers are well equipped to consider topics having to do with the
concepts and theories that economists employ—for example, economic rationality, Nash
equilibrium, perfect competition, transaction costs, or asymmetric information. Philosophers can
offer useful analysis of the strengths and weaknesses of such concepts and theories—thereby
helping practicing economists to further refine the theoretical foundations of their discipline. In
this role the philosopher serves as a conceptual clarifier for the discipline, working in partnership
with the practitioners to bring about more successful economic theories and explanations.

So far we have described the position of the philosopher as the underlaborer of the
economist. But in fact, the line between criticism and theory formation is not a sharp one.
Economists such as Amartya Sen and philosophers such as Daniel Hausman have
demonstrated that there is a very constructive crossing of the frontier that is possible between
philosophy and economics; and that philosophical expertise can result in significant substantive
progress with regard to important theoretical or empirical problems within the discipline of
economics. The cumulative contents of the journal Economics and Philosophy provide clear
evidence of the productive engagements that are possible when philosophy meets economics.

In order to accomplish these goals, the philosopher of economics has a responsibility

parallel to that of the philosopher of biology or philosopher of physics: he or she must attain a
professional and rigorous understanding of the discipline as it currently exists. The most
valuable work in the philosophy of any science proceeds from the basis of significant expertise
on the part of the philosopher about the best practice, contemporary debates, and future
challenges of the discipline. Only through such acquaintance will the philosopher succeed in
raising topics that genuinely engage with important issues in the profession.

Main Discussion

Resources are finite, and people and governments must make choices. By studying the way
that people make choices, the better choices we make! Economics is about making choices. We
make all kinds of choices every day. How much should I spend on gas? What’s the best route to
work? Where should we go for dinner? Which job or career should I go for? What are the pros
and cons of finishing college versus taking a job or inventing the next, best Internet startup?
Which roommate should take care of washing the dishes? Can I get that dog as a pet? Should I
get married, have children, and if so, when? Which politician should I vote for when they all
claim they can improve the economy or make my life better? What is “the economy,” anyway?
What if my personal or religious principles conflict with what people tell me is in my best
economic interest?
Many people hear the word “economics” and think it is all about money. Economics is not just
about money. It is about weighing different choices or alternatives. Some of those important
choices involve money, but most do not. Most of your daily, monthly, or life choices have
nothing to do with money, yet they are still the subject of economics. For example, your
decisions about whether it should be you or your roommate who should be the one to clean up
or do the dishes, whether you should spend an hour a week volunteering for a worthy charity or
send them a little money via your cell phone, or whether you should take a job so you can help
support your siblings or parents or save for your future are all economic decisions. In many
cases, money is merely a helpful tool or just a veil, standing in for a partial way to evaluate
some of the goals you really care about and how you make choices about those goals.
You might also think economics is all about “economizing” or being efficient–not making foolish
or wasteful choices about how you spend or budget your time and money. That is certainly part
of what economics is about. However, that’s just the tip of the iceberg. We all know that we can
save money or time by being more efficient in our planning. A trip to the supermarket can be
coordinated with a trip to take your child to school or to deposit a check at the bank across the
street to save on gas. But we sometimes don’t choose the most efficient options. Why not?
Economics is also about plumbing the depths of why we sometimes do and sometimes don’t
make what seem like the most economizing or economical choices.
Is economics a science (like physics), or is it a social science, or even an art? What is the
difference, and what do we know about what we can’t or don’t know for now? Can economic
problems be solved by better government, more experts, bigger computers, more engineering,
better education, less government, more dispersed knowledge, more markets? How can we
make informed choices?
You’ve probably heard that economists disagree about a lot of things. Actually, what economists
disagree about is politics or public policy, not economics. Exploring the interface between
politics and economics is part of the fun.
Difficult as it may be to define economics, it is not difficult to indicate the sorts of questions that
concern economists. Among other things, they seek to analyze the forces determining prices—
not only the prices of goods and services but the prices of the resources used to produce them.
This involves the discovery of two key elements: what governs the way in which human labour,
machines, and land are combined in production and how buyers and sellers are brought
together in a functioning market. Because prices of the various things must be interrelated,
economists therefore ask how such a “price system” or “market mechanism” hangs together and
what conditions are necessary for its survival.

Reference

https://www.investopedia.com/terms/e/economics.asp

http://www-
personal.umd.umich.edu/~delittle/Encyclopedia%20entries/Philosophy%20of%20Economics.ht
m#_ftn1
https://www.econlib.org/library/Topics/College/whatiseconomics.html

https://www.britannica.com/topic/economics

https://www.soas.ac.uk/cedep-demos/000_P542_EP_K3736-Demo/unit1/page_07.htm