Thinking about what ‘economics’ is

I am trying to gradually clarify my perception of what economics is.  Here are some cliff notes from a recent discussion I had:

Economists try to answer questions about “the allocation of resources given scarcity”.  Every question is quite specific and different, economics education involves learning a broad set of skills that allow us to tackle questions.  To do this economists use models.  Models embody a set of assumptions, assumptions that create an “artificial world” that we can deduce conclusions from given these assumptions.  We then use data, robustness testing, and rhetorical debate to help us inductively infer conclusions about the real world question we are asking from these artificial worlds.

As a result, economics is a discipline that can discuss a wide range of social questions that range from deterministic statements, to prediction, to description, to exploration – but the answers provided are always conditional on the question asked, and the assumptions we have made for answering that specific question.

Further details can be found in these (in order):

  1. What is economics in the most general sense.
  2. On economics as method.
  3. On assumptionsand again on assumptions.
  4. What does it mean to have many models?
  5. Economics and science – careful with the prediction call.
  6. Before railing against economics – what economists do.

If you know of any literature I should peek at to help inform myself on the status of the accumulation of knowledge and method in the discipline (as there is A LOT of improvement I can do in my understanding here) I would really appreciate it.

  • Peter Cresswell

    Well, since you asked … I’d recommend ‘The Economic Point of View,’ by Israel Kirzner — looking at what defines (and how to define) economics, “describing the march of economics from a science of wealth to a science of human action.” Y0u can read it online if you like PDFs:

    And for an opposite argument, by George Reisman, who argues that economics *is* a science of wealth, I’d recommend Chapters 1 and 2 of his book ‘Capitalism’ on ‘The Nature & Importance of Economics’ and ‘Wealth and its Role in Human Life.’ You can also read this online in PDF:

    • Cheers, I will have a peak – looks interesting!

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