Your Shortest Definition?

Discussion in 'Business & Economics' started by Carcano, Dec 9, 2010.

  1. Carcano Valued Senior Member

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    Supposing you had to come up with a definition of economics short enough to fit in a dictionary...what would it be?

    For myself, I would not start out by pretending its a science...certainly not merely because it involves numbers.

    Nor would I call it an art...although it does include an element of aesthetics.

    One can easily see how much of the value in things people want is devoted to appearance.

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    Its perfectly functional...just not particularly charming.

    So, I would simply define economics as a STUDY...what the Greek philosophers called a 'logos'.

    The study of exchanges quantified through the medium of money.

    Thats the most concise sentence I can manage at the moment.
     
    Last edited: Dec 9, 2010
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  3. nirakar ( i ^ i ) Registered Senior Member

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    The study of [ ( What people want + What people can be convinced to want ) ÷ ( Natural resources + tools + effort + technique + intuition + luck) ] = Economics
     
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  5. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    I think that is quite good, but seems to omit considerations of financial policy, such as projection of effect of the new taxes (or the extension of GWB's reduction*) For specific example: Keynesian publications would not be "economics" - no money exchanged or quantified. With that definition, most of the Nobel Prizes in economic were not given for winner's work in economics!

    I think I would define economics as

    "The study of how resources should be allocated or developed."

    As in the broad sense economics need not have anything to due with money. I.e. economics existed long before money did. For example, the cave man made an economic decision considering many factors like the weather, etc. when deciding what to take with him (resources) and where to go (mountains or into to valley as they have different resources) to hunt and for how long he would be gone (His time is his main resource.).

    Perhaps that is what niakar is trying to say, but I did not understand how division can be applied to wishes, etc.

    *BTW here is comment on that I read 5 minutes ago, which I think is basicly correct:
    "... Not one dime of this new tax deal or extended unemployment benefits are paid for by spending cuts. Thus, more borrowing from the Chinese to pay for the tax cuts—to the tune of $400 billion or so! The result will push the dollar down further as commodities prices, inflation, and China stocks rise ..."
     
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  7. Carcano Valued Senior Member

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    I'll get to the above comments in a day or so, but first let's look at the Greek roots of the word.

    Economics comes from OIKONOMIA...oikos meaning house, and nomos meaning management or law.

    Originally there was little in the way of macro economics so the word was applied to small systems like households, guilds or trading partnerships.

    The Wiki article's definition of economics says:

    "Social science that analyzes the production, distribution, and consumption of goods and services."

    I dont think either of these are adequate because theres no mention of either exchange or money.

    For example, If I'm a farmer and I produce a crop of oats this is merely an act of farming...it falls under the study of economics only when I exchange it for something else.

    And this really only becomes a worthwhile study if that something is a form of money that functions as a universal medium of value, regardless of what its value is exchanged for.

    Prior to money, you had to find a counter party with exactly what you wanted, and who ALSO wanted exactly what you had to exchange.

    An even more serious error is the fusion of the words SOCIAL and SCIENCE.

    There are no 'social sciences' really...because true science involves laws and formulas that can not only be verified, but also replicated an infinite number of times...always and forever.

    The human world doesnt operate like that.
     
  8. Carcano Valued Senior Member

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    So for you, economics is only a study for politicians???

    You have choosen the phrase 'should be' instead of 'what is'.

    Only politicians can make laws about what should be.

    Your definition excludes money altogether...does that mean eliminating money is on your lists of should be's?
     
  9. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    definitely No. I even gave you the example of caveman making economic decisions as he left he cave to go and hunt. I make economic decisions every day many not concerned with money - such as how to spend my time, each hour being more valuable as I grow older. Some very trivial, like how much tooth paste to put on the brush.
    No, it does not exclude money as money is a resource you must (or can) allocate or use to develop resources, for example, your brain by paying tuition at a college.

    Money, being only a convenience to avoid the complexity of direct trading in a barter economy, is not fundamentally very important to economics, except as just noted, it is a resource. Interest is just the rent of this resource. Money interest is also not fundamental to economics. For example borrowing 10 eggs and repaying with 12 a week later has all the fundamental attributes that money interest has, but money interest makes interest easier and more flexible.

    I.e. Money is NOT fundamentally what economics is about. - It is just an aid to facilitate what economics is about. Again, economics existed long before money did. Economics is about the development and/or allocation of resources. "Allocation" includes all trades / exchanges such as 14 chickens used to buy one young pig. Although both parties of this exchange probably profited if it was freely done, economics can be used to see who got the greater profit, who is taking the greater risk. (The one acquiring the pig may have a 100% loss if it is sick and dies.)
     
    Last edited by a moderator: Dec 11, 2010
  10. nirakar ( i ^ i ) Registered Senior Member

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    I was half Joking. Many economists want economics to be a mathematically based science but it is too hard to quantify all the factors so economics can't be a mathematically based science.

    Is economics an art? I agree with Carcano that economics is best described as a "study". But a study of what?

    When economics is just a "study of exchanges quantified through the medium of money" it fails to be as good as it can be at studying all the unfolding intricacies of the interplay of supply and demand.


    What people want naturally + What people can be convinced to want = potential Demand. Give those people money and the potential demand starts becoming real demand.

    Natural resources + tools + effort + technique + intuition + luck = potential supply. Add demand both of buyers and demand for other stuff as an incentive for producers and potential supply starts becoming real supply. Did I left out law and order which is essential for production? No law and order can be classified as a production technique.

    I could just say supply and demand but people don't think deeply enough about what supply and demand mean.

    Maybe I should change my equation because I did not mean to overemphasize potential supply and demand instead of actualized supply and demand. If the factory has not been built yet it can't produce.

    So change "The study of [ ( What people want + What people can be convinced to want ) ÷ ( Natural resources + tools + effort + technique + intuition + luck) ] = Economics" to "The study of Demand ÷ by Supply = Economics

    Does the math work? Probably not. Maybe that makes it metaphorically better because the math never does seem to work in economics it just teases as if it would work.




    Let me try again more seriously:

    The study of the interplay of supply and demand.

    This is broader than "The study of exchanges quantified through the medium of money" but includes "The study of exchanges quantified through the medium of money".

    I do this because I think the difficult to quantify is still part of economics. The question is economics about supply and demand or flawed measurements of supply and demand.

    Is economics about production or about the forces that create production?

    Maybe I will need a third try.

    Below about flawed measurements of production.

     
  11. Carcano Valued Senior Member

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    You are using VERY broad definitions of words like resource and allocation.

    Personally, I dont think theres much to study without at least the first two of the three great innovations.

    The first being money.
    The second being interest.
    The third being stocks or shares.
     
    Last edited: Dec 11, 2010
  12. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    No, you have an extremely narrow idea of what is a resource. A resource is anything you have and can use (allocate) for some desire. It is not just money with which you can buy things.

    With your "only money is a resource" POV, the world was without any resources prior to the invention of money - that is not only a very silly POV but completely false. Economics is concerned with much more than money. As I have already noted almost all Nobel prizes in economics were mainly concerned with broader aspects of resource allocation and or development of resources. The last one was about the things like the fact that an advantage in natural resources did not determine where airplanes were built - history did more to determine that. A country that has a lot of aluminium resource will not drive Boeing from Seattle where there is none. It had nothing to do with money and this year's Nobel prize in Economics probably will not either. Perhaps none ever have been directly concerned with money? I think ALL have been strongly concerned with, or even focused on, the development and allocation of resources.

    Perhaps the most important resource all have is our time. How we chose to spend (allocate) it is probably the most important economic decision we make.(Still using my definition of economic decision as making allocations of resources or the development of them.) I allocated many hours of the decade of my 20s to studying and learning physics, etc. and that paid off well, even in monetary terms.

    Thus, owning a coal mine, owning a stack of lumber, owning a hammer and some nails, yes even my prior example of owning toothpaste in a tube, is a resource. With all of theses when you decide to use them for something (instead of sell your resource for money, which only is a store of value and useless by its self) you make a non-monetary economic decision, often by habit with little thought to their alternative uses.

    For example, the toothpaste could be used to polish some silverware. In it normal use, pilling all you can on the toothbrush or putting just a tiny speck there are bad economic decisions. The first will exhaust that resource too quickly for no gain. The second will extend the life of that resource, but increase you dental care expenses more than the savings. Habit allows you to make these economic choices with essentially no conscious thought, just as habit allows you to do many other things, like drive home from work with little thought about where to turn. The fact that you don't need to consciously think about where to turn or how much toothpaste to use, doesn't mean they are not economic choices made. Bad choices are a waste of your resources. (Your time if driving a longer route and toothpaste if over-filling the brush.)

    Almost everything you decide is an economic decision and bad decisions will waste your resources.
     
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  13. Carcano Valued Senior Member

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    I havent said money is the ONLY resource anywhere on this thread...go back and check!

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    Paper or digital money is not a resource, only a legally enforced store of value. All resources have value, but not all quantums of value are resources.

    However, for most of history money was some form of resource....like gold and silver. Prior to the arrival of Europeans RICE was widely used as money in Japan...and it was a good choice because it was easily divisible. This was the most 'resourceful' form of money I can imagine.

    Now go down the list, and you'll see that MOST nobel laureates have focused on quantums of value (money)...not resources.

    http://en.wikipedia.org/wiki/List_of_Nobel_laureates_in_Economics
     
  14. Pandaemoni Valued Senior Member

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    For the shortest definition I would go with:

    "the study of the allocation and use of scarce resources."
     
  15. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    I agree adding modifier "scarce" is a useful, but restrictive, improvement, but don't forget that economics also includes studies evaluating the development of new resources. - For example: How much, if anything, Ford should spend on developing better batteries for electric cars or an oil company on prospecting for oil etc. Economics is more than just decisions about the allocation of existing resources.
     
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  16. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    To carcano:

    At your link I clicked on the first blue “economics” thinking I would find the Nobel winners in economics listed there, but instead found my definition of economics in slightly more words:

    “Economics is the social science that analyzes the production, distribution, and consumption of goods and services.”
    goods and services. = resources (things you can use or sell)
    consumption = allocation (use of resources such as toothpaste example)
    production, distribution = development (such as new oil well, with pipeline to refinery.)

    I.e. except for calling it a “social science”, I said: “Economics is the social science that analyzes the development and allocation of resources.

    Replace my three words (development, allocation & resources) with their equivalents given in the above equations and get their definition back again.
    Again, not a word about money.

    Then I returned to your link and paged down to discover the list of Nobel winners. Only the summary of the winner’s work in 1974 mentions money. The summary for 1991 does mention “cost” ("for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy") so I’ll be generous and agree that 2 out of 41 Nobel Economics Prizes were, at least slightly, concerned with money.
     
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  17. Carcano Valued Senior Member

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    Yes, I copied that sentence in post #4, but again Billy, you're mixing up definitions and slaughtering them with an axe!

    Distribution doesnt mean development.

    Consumption doesnt mean allocation.

    And you did NOT use the word 'analyzing'...you wrote "the study of HOW resources SHOULD BE allocated or developed."

    Analyzing how something works is very different than deciding how it SHOULD work.
     
  18. Carcano Valued Senior Member

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    Are you sure this paragraph isnt a joke...

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    Go back and read the list again Billy...most of values addressed are monetary values.
     
  19. Pandaemoni Valued Senior Member

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    I tend to consider the development of new resources as being an allocation problem as well. All allocations have a goal: feed my family, build a skyscraper, sell a boat, invent a new and better battery, and reaching those goals (or attempting to reach them) involves allocating resources. The goal might be to develop a new resource or improve an old one, but that is the same whether the goal is inventing a new battery, digging a new well, or working out to impress the ladies.

    I wouldn't object to "The study of human decisionmaking under conditions of scarcity."
     
  20. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    OK then we agree on a short definition.
    Nor would I, so long as it is understood that "decision making" does not necessarily imply taking some action. I.e. after economic evaluation of doing X, I decide not to do X, and that was "decision making" too.
     

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