Posted by: Michael Mandel on January 16
Every economics textbook seems to have a definition of economics right in the first chapter. And all the definitions seem to have something to do with scarcity. Here are some real examples:
Economics is the study of choices consumers, business managers, and government offical make to attain their goals, given their scarce resources.
Economics is the study of how people make choices under conditions of scarcity and the results of those choices for society.
Economics is the study of how society manages its scarce resources
Now, I’m doing an economics textbook for McGraw-Hill, and I’m thinking about using a different definition of economics, which doesn’t depend on scarcity.
Proposed definition: Economics is the study of the functioning-–and malfunctioning—of the economy, with the aim of improving living standards
My justification for a different definition is that there are big chunks of the economy where scarcity is not important, in any but a formal sense. If anything we seem to have an abundance of food and manufactured goods, and the cost of moving and manipulating information has fallen very very sharply. I’d also like to get in the sense that economics has a purpose.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.