God, Life, and Economics
As I envisioned my first Economics lecture at my dream college, I wondered about the first question my professor would ask us students. She would probably begin by asking “What is Economics?”. I imagined each one giving their own definition. I could recall the various definitions I had read in my textbooks. None of them seemed to do justice to this elephantine subject. It was then that I drew an interesting correlation between God, Life, and Economics.
How would you define economics?
You might say, “Economics is the agent that ties the relationship between unlimited human wants and scarce resources to attain an optimum level of satisfaction”. This statement is not incorrect, but it manages to capture only a very narrow facet of economics. It describes constrained optimization efficiently, but only in the context of satisfaction. The aim of economics is not only to optimize satisfaction but also welfare and development. But isn’t satisfaction similar to welfare? No, you can be satisfied by drinking beer, but it damages your liver and therefore its consumption does not enhance your welfare.
Another definition of economics could be- “Economics is the study of human behaviour using various instruments of anatomization”. This seems right. Economics indeed talks about consumer theory, demand and supply, markets, and so on. But again, this definition only focuses on what we refer to as behavioural economics. Moreover, it does not explicate the various types of instruments that can be used for analysis. Take consumer theory for example. Consumer behaviour can be studied by using psychology, graphical models, or mathematical expressions of utility functions. Mostly, all of these tools are used together.
So, in order to better define economics, many of us are tempted to split it up into various fields and then propound definitions for each of them. Most often, economics is classified into Microeconomics and Macroeconomics. You may also know about Econometrics, Development Economics, Welfare Economics, and International Economics. But, is that all? Definitely not. You have Defense Economics, Economics and Crime, Space-based Economics, Law and Economics, Economics in public policy, Labor economics, and whatnot. On the basis of historical origin and evolution, economics may again be classified into Classical Economics, Marxist Economics, Neoclassical Economics, Monetarist Economics, Keynesian Economics, and several others. You see, the list is endless. Economics has been structured by various economists, philosophers, mathematicians, and political thinkers. Economics also works differently under different circumstances. It is different for command economies, market economies, and mixed economies. Application of principles of economics changes with change in time, price levels, aggregate output levels, unemployment rates, inflation rates, and various other indicators. Nearly all known definitions of economics fail to capture the various aspects on which an economy is structured.
Let me give you an analogy. Try defining this four-letter word: ‘Life’. Everyone has their own interpretations of life. You see life in different ways, live in discrete ways, and feel in distinct ways. Try googling ‘Define life’. Some people use psychology to define life, while others might use philosophy. In fact, I even found a mathematical definition of life (the definite integral of the time rate of happiness with respect to time from birth to death). I hope you understand what I’m getting at with this.
Take another analogy. This time a three-letter word: ‘God’. Difficult? The definition of God varies from religion to religion and sect to sect. In monotheism, God may be considered omnipotent, omnipresent, and omniscient. In atheism, God may not exist at all. You also have pantheism, dystheism, deism, open theism, agnosticism et al.
So, here’s what I wish to delineate: Economics, like god and life, lacks a single definition. It has different forms, different contrivances for description, different principles for non-identical scenarios, and different interpretations. Identifying a single apt definition for economics simply cannot be justified.
This, however, does not mean that textbooks should not define Economics at all. Definitions are important for forming a basic structure on which theories and models can be placed. It’s just that the structure must be flexible and liberal enough to allow space for incorporating creative evaluation. It cannot be well-defined, but its existence is essential for the emergence of Economics as an ever-expanding universe of knowledge and perceptions.
