What is economics?

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Economics is a science devoted to the study of resource management; literally its etymology comes from Greek “oikonomia” meaning management or rules (“norms” law) house (from “oikos” home). Given the importance of this discipline has taken over the story, is that there have been many different definitions for it, depending on the school of thought that address. For example, Adam Smith, a philosopher pioneer in the development of economic science considered by many as one of the fathers of it, defined it as research on the causes and nature of the wealth of nations.Other definitions speak of the discipline that studies wealth, in terms of production and distribution of goods and services, as distinct from the political (when speaking nations). A colloquial way of seeing it, is thinking of it as the science that deals with human actions, seeking to satisfy their endless needs, through products or scarce resources.

In fact, those concerned with human acts, is that the economy is seen as a social science, despite the intuitive is a science relate cone harder style of mathematics or physics, but not is, and the fact that human behavior and define the form makes economic events can have a high level of complexity and subjectivity, which makes the subject prone to elaborate debates, no simple answers to the problems and challenges of this type in the world.

That said, we can say that the economy and its study is fundamental in today’s world, not that it was not once, but by the development that has experienced meteoric global population along with changes in their customs and usages, is Today the economy is ruled almost all, at least in the material of daily life for people. Historically we have writings and papers on the subject since the time of ancient civilizations such as Greek, Roman, Arab, China and India. Notables as Aristotle and Aquinas wrote directly or indirectly on the subject, but the truth is that by the time the problems were about the “resource management” were quite limited, between the sixteenth and eighteenth basically arguing about the importance of the market in terms of transaction of goods, which led to the accumulation of gold and silver, versus the benefit of promoting agricultural production, and also on how best to implement the tax.

It is considered that the publication of the work of Adam Smith, “Wealth of Nations”, by the year 1776, corresponding to the beginning of the history of modern economics as a science developed systematically. In this work, there was talk of production, capital, labor and land as the foundation of wealth for a state, and argued about the importance of productivity and profit margins, as well as the separation of work in well-defined roles, what we can see today in any business structure and production system. Was also concerned with the importance of economic development of individuals, allowing access to consumption, which in turn would be the point of production.

Of course there are many schools of thought, as I mentioned, such as Marxism, which argues among other things that in a conventional scheme pays only a fraction of the workers who actually produce value, what would be the source of a form of “exploitation” of labor. We also have a school based on the work of John Maynard Keynes, who is considered one of the fathers of modern macroeconomics, suggesting among other things that certain dynamics in the market are not solved by themselves, such as unemployment, under certain conditions . Are the “monetarist” or as also called school of “Chicago” to have arisen just at the economics faculty of the university, which states that the market will behave stable, provided that the amount of money outstanding not have large variations.

The above are just examples of some of the positions of these schools of thought on key issues, but of course the issue is vastly more complex, and there are also many approaches from these schools, establishing gold standards in themselves. A simpler way to look at it, is that a certain position is more or less “liberal”, as when we speak of the free market, where ideally the supply and demand regulate prices of products and services, and therefore other factors and realities of an economy, such as labor supply, wages and other. The problem is that in practice the market is far from perfect and imperfect markets can carry these strong distortions, striking workers mostly negative, so it is that against this liberalism is talk of a government-regulated market .

But the truth is that today in the world that operates basically trend even in communist countries, is technically a free market, with varying degrees of regulation by the state, which would become a “social market economy “although many will not admit it politically, but it’s reality, for having demonstrated over time, at least until today, be the best form of resource management, at least in my opinion.

In economics, we can find several branches. For example, we can point to quantitative economics, statistics and econometrics. Also applied economics, labor economics, development economics and social economy. We can also find finance, public and business, among many other branches of the economy, all very large issues and individual, so will raise only as an example.

And covering other topics, enters distinguish micro and macroeconomics, in the first, microeconomics, we study the basic elements of the market, in terms of individual agents that transact. Topics of study for this area are the relationship between supply and demand, costs and efficiency in production, as markets behave and relate to each other, the role of the public sector, etc.. Each of these topics is so wide that would by themselves for several items, so for now just the mention.

While in the field of macroeconomics talk about issues affecting the economy of an entire country or the world, such as inflation, economic growth, unemployment and fiscal policies. For example here we also have cycles, where one searches for the causes and solutions to the famous economic recessions and depressions, said to affect more and more often to the world. For one thing locally is to avoid this at all costs, while some proponents argue that they are normal and healthy part of an economy, and therefore countries should have policies “countercyclical” in such a way to decrease the intensity of the effects of these changes to be submitted anyway, like it or not.

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