Defining economics

Economics is a science concerned with how people use available resources to satisfy their wants through the process of production and exchange.

There have been many definitions of economics in the past. The earliest definitions envisaged economics as the study of wealth and the older name for economics was "political economy". Later economics was defined as "the practical science of the production and distribution of wealth".

At the turn of the 19th century economists defined economics as a study of man's actions in the ordinary business of life. At that time economics focused on how men got their incomes and used them.

In more recent years, the subject of economics was defined more precise­ly as "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses". ,

Today economics deals with data on income, employment, expenditure, prices, production, consumption, transportation and trade.

economics n - экономика (наука)

be concerned with - заниматься чём-л., касаться чего-л.

resources n - ресурсы

wants n - потребности

definition n - определение

envisage v - рассматривать

wealth n - богатство

define v - определять

distribution n - распределение

income n - доход

precisely adv - точно

relationship n - связь, отношение

scarce adj - дефицитный

alternative adj - альтернативный

expenditure n - расходы

consumption n - потребление

Economics and its great man

1. Economics is a social science concerned with how mankind organises itself to accommodate scarce resources to their wants through the process of production, substitution and exchange.

2. By the beginning of the eighteenth century economics had taken shape as an academic discipline, largely as a branch of political economy. It should be noted that the old name for economics was "political economy". Adam Smith was the founding father of modern economics as an academic discipline.

3. Adam Smith was born in 1723. For most of his life he was a professor of philosophy in Glasgow, Scotland. His first and only economics book, The Wealth of Nations, was not published until 1776, when he was 53.

4. Smith's purpose was to explain why some nations become wealthier than others. He was fascinated by the rise of industrialism in the England and Scotland of his time.

5. Over his lifetime Adam Smith's economic investigations ranged from the theory of trade to economic growth and an attempt to model the working of the economy. He believed that a free market would maximise the welfare of the population. It followed from his works that the role of government in the economy should be minimal. The government should provide defence, justice and public works. The only market intervention should be to prevent monopoly and to promote competition.

6. Smith argued that competitive business was not just a possible way but the best way to increase the wealth of a nation. He thought government restraints on competition did more harm than good.

7. Division of labour was seen by him as the source of society's capacity to increase its productivity. According to Adam Smith technical progress and free trade between nations were central to economic growth. If a country wished to improve its standard of living it had to export more than it imported.