================= HES POSTING ================= [Note from the moderator: For an earlier discussion about the definition of economics, check out our archives at: http://cs.muohio.edu/Archives/hes/jun-95/ --E-MS] Patrick Gunning wrote: >The fundamental idea is that of how normal human beings >interact under the conditions of the market economy. Mary Schweitzer replied: >If we are talking history of economic thought, I presume we mean >the history of thought about economics, which brings us inevitably >to a definition of economics. >This was not the definition of economics, as a subject, that was >taught to me in school. Rather, I learned that economics is >"the study of the production and distribution of goods and >services". No "market" necessary there. >One might add "in the face of scarcity". No market there, either. And: >I doubt Samuelson would define economics that way today. >On a more formal level, most economic analysis with which I am familiar >is of the nature of constrained maximization -- that is, >maximizing a set of goals subject to a set of constraints. >Nothing necessary there about markets either. WELL, at least, we are on the right track -- talking about the definition of economics. I am pleased to defend my definition: Why do I define economics as the study of economic interaction under the conditions of the market economy (use of money, private property rights, specialization)? The answer is twofold. First, I believe that THE DRIVING FORCE BEHIND PEOPLES' INTEREST IN THE SUBJECT MATTER OF ECONOMICS IS THEIR INTEREST IN FINDING OUT THE KIND OF DECISIONS A GOVERNMENT MIGHT MAKE TO HELP CAUSE THE PRODUCTION OF WHAT ORDINARY PEOPLE REGARD AS WEALTH. Second, I do not believe that the simple proposition that THE PROSPECT OF MUTUAL GAINS FROM TRADE PROVIDE INCENTIVES FOR INDIVIDUALS TO PRODUCE WHAT ORDINARY PEOPLE REGARD AS WEALTH has been refuted. The study of economic interaction in the market economy helps us learn more about the second proposition. Although what has come to be known as Adam Smith's proposition has not been refuted, it has been challenged in many ways. In order to judge the merit of the challenges, we must begin with a firm understanding of economic interaction under Smith's conditions. We gain this not so much by studying observable markets but by putting ourselves in the shoes of the actors who participate in the market economy. Not until we have this kind of intersubjective understanding -- i.e., the kind that good teachers of economics try to instill in their students -- can we competently judge the merit of arguments to the effect that the market economy needs to be aided, regulated, controlled, manipulated, or eliminated. Thus, the ultimate reason for studying the market economy is to evaluate arguments regarding government policies. This, in simplest terms, is the reason I define economics in this way. Having defined economics in this way, I turn to the dead economists. I ask: In what way did they contribute (a) to our understanding of economic interaction under the market economy and (b) to our understanding of the effects of government policy in light of the propensity of individuals to produce wealth under the market economy conditions. I would invite Mary Schweitzer to defend one or more of her definitions or to attack mine on grounds other than: "That is not what I learned." And having done so, I invite her to go on to explain how her definition provides her with a guide to her work in the history of economic thought. -- Pat Gunning http://stsvr.showtower.com.tw/~gunning/welcome ============ FOOTER TO HES POSTING ============ For information, send the message "info HES" to [log in to unmask]