Economics has many definitions. The reason is that Economists see the subject from different points of view. " Economics is a social science that studies resource allocation, distribution and consumption, capital and investment, money and its movement , efficient utilisation and management of the factors of production in order to make life more meaningful, create utility and maximise profit" - Osunsakin Adewale (2018)
Adam Smith: He is regarded as the father of Economics because he laid the foundation of Economics as a discipline/subject. In his book titled “The wealth of nations” written in 1776, he defined Economics as “an inquiry into the nature and causes of the wealth of Nations”.
Other notable Economics are Alfred Marshall (1890), John Stuart Mill (1843); Professor Alfred Pigou; Lord Keynes, H.J. Davenport; Professor Paul Samuelson, Professor Sam Aluko of Nigeria, Professor Lionel Robbins etc. The most widely accepted definition is given by Professor Lionel Robbins which says “Economics is a social science which studies human behaviour as a relationship between ends and scare means which have alternative uses”. His definition is widely accredited because it embraces the following terms:
Economics is a Social Science because it deals with human behaviour and the activities of the people in the society.
Ends: These are needs which are desired by the consumer to give satisfaction. Examples are cares, clothes, foodstuffs, handsets, books etc.
Scarce means: These are resources which are scare relative to the demand for them.
Alternative uses: The scarce resources can be put to so many uses. For example land can be used for farming or construction of houses, factories.
SCOPE OF ECONOMICS
Economics covers the actions and activities of individual, households and firms (microeconomics); and the actions and activities of the government (macroeconomics)in relation to production, distribution, consumption, money and exchange of goods and services.
IMPORTANCE OF STUDYING ECONOMICS
We study economics for the following reasons:
Allocation of resources:
It enables the individuals, households, firms, and the government to know how limited resources can be used effectively and efficiently.
Reduction of resource wastage: Economics helps to reduce wastage in resource allocation. Economic decision-makers channel their resource to areas where they are mostly needed.
Solution to basic economic problems: the study of Economics provides students with basic skills for analyzing economic problems
Technique of reasoning and critical thinking: Economics teaches the techniques of reasoning and power of critical thinking.
Provision of basic tools for analysis: Economics equips the economic agents with the tools of economic analysis to understand and solve current issues and economic problems confronting the society e.g. oil glut, oil spillage, oil theft, unemployment etc.
Rational decision-making; economics enables individuals, and other economic agencies to be rational or reasonable in the application of scare resources to satisfy unlimited wants. A normal individual takes decisions in the most acceptable and beneficial ways.
Helps government economic policies and development: economics helps us to weigh the economic policies of the government, determine their advantages and disadvantages and offer the right suggestions on the way forward e.g. problem of unemployment, ‘white-elephant’ projects, inflation, budget etc.
ECONOMICS AS A SOCIAL SCIENCE
Economics is not a physical, pure or natural science subject like Physics, Chemistry or Biology because its experiments are not carried out with chemicals in the laboratory or with plants in the farm. Rather, its scientific nature stems from the fact that Economics has laws; and again its theories and principles are analyzed based on scientific techniques, like observation, selection and classification of data, analysis and generalization; just like the pure sciences. Its theories and principles can be verified with facts and figures. In the strict sense of the word, Economics is a Social Science. This is because it studies human behaviour, which though cannot be tested in laboratory setting, but can be observed and tested by applying them to real life situation.
