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Definition of Economics in General and According to Experts

Definition of Economics


General Economic Definition

The word economy is derived from the ancient Greek word oikonomia which means family or household management. It is thus clear that the economic subject was first studied in ancient Greece.

There is also an opinion explaining the economic understanding of everything related to human effort to fulfill the needs of his life so that prosperity can be achieved. Economics means caring for the financial, industrial, and trade organizations of a country, region, or community.
Thus, the general economic sense is a science that learns about human activities related to the production, distribution, or consumption of goods and services.

Economic understanding by experts

In addition to the general economic understanding as described above, there is also a sense of economics based on the opinions of some economic experts. The following is an economic understanding based on experts ' opinions.

The understanding of economics according to Adam Smith, Economic understanding can be traced back to the time of Adam Smith (1723-90) – Great Scottish economist. Following the Merkantilis tradition, Adam Smith and his followers regarded the economy as a wealth science that studied the production, consumption, and accumulation of wealth.

His emphasis on wealth as an implied economic subject in his great book The investigation of the nature and causes of the riches of the nations or, more popularly known as the Wealth of nations published in the year 1776.

According to Smith, the great object of political economy from every country is to increase the country's wealth and power. Like the Mercantilis, he did not believe that the wealth of a nation lies in the accumulation of precious metals such as gold and silver. For him, wealth can be conforming as goods and services that ordered the exchange of value. Economics cares about the nation's wealth generation. Economics not only relates to the production of wealth but also the distribution of wealth. The way in which production and distribution of wealth will occur in the market economy is a Smithian ' invisible hand ' mechanism or ' pricing system '. However, the economy was considered by Smith to be ' science of wealth. '

John Stuart Mill 
John Stuart Mill (1806-73) argues that economics is a science of production and distribution of wealth. Another classical economist Nassau William Senior (1790-1864) argues, "the subject of political economics is not happiness but wealth. " Thus, the economy is a science of wealth. However, the last decade of the 19th century witnessed a spicy attack on Smithian's understanding and in turn emerged another flow of thought under the leadership of an English economist, Alfred Marshall (1842-1924).

Economic terminology by Marshall
Alfred Marshall in his book ' Principles of Economics ' published in 1890 emphasizes on human activity or human welfare rather than wealth. Marshall has made the economy a "science about people when they live and move and think in the business of everyday life." He argues that economics, on the one hand, is the science of wealth and on the other is the science of Human.

The emphasis on human welfare is evident in Marshall's own words that economics is the science of humanity in the business of everyday life that examines part of the individual and social actions most closely associated with achieving And with the use of welfare material requirements.

Thus, economics is a science that examines the wealth and also the science that learns about humans. According to Marshall, wealth is not the purpose itself as the classical writers think it is the means of achieving the ultimate goal of human welfare.

Economic definition by Robbins
The most accepted economic sense was given by Lord Robbins in 1932 in his book Ess An Essay on the Nature and the Significance of Science of Economic. According to Robbins, both wealth and human welfare should not be regarded as the subject of economics. Its understanding goes in terms of scarcity:  "Economics is a science that learns human behaviour as a relationship between a purpose and a rare means that has alternative uses."

In this view, it is said that the economy is essentially a science of scarcity and problems that elicit scarcity. Thus, the economic main focus is on the cost of opportunity and optimization. This sense of economic scarcity has expanded the scope of the subject. Override the value assessment issue. Robbins made the economics of positive sciences. By finding basic economic problems, scarcity problems and options. Robbins brings the economy closer to science. No wonder, this sense attracts a lot of attention.
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