Economics
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| + | [[Image:Ill-Matched Lovers (Quentin Matsys).jpg |thumb|left|200px|[[Love for sale]] | ||
| + | <br>Illustration: ''[[Ill-Matched Lovers (Quentin Matsys)|Ill-Matched Lovers]]'' (c. 1520/1525) by Quentin Matsys]] | ||
| + | {| class="toccolours" style="float: left; margin-left: 1em; margin-right: 2em; font-size: 85%; background:#c6dbf7; color:black; width:30em; max-width: 40%;" cellspacing="5" | ||
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| + | "[[Property is theft!]]" --Pierre-Joseph Proudhon | ||
| + | <hr> | ||
| + | [[Military–industrial complex]] | ||
| + | |} | ||
| + | [[Image:Pyramid of Capitalist System.jpg|thumb|right|200px|''[[Pyramid of Capitalist System]]'', anonymous American cartoon (1911)]] | ||
| + | [[Image:Eugène Delacroix - La liberté guidant le peuple.jpg|thumb|200px|This page '''{{PAGENAME}}''' is part of the [[politics]] series.<br><small>Illustration:''[[Liberty Leading the People]]'' (1831, detail) by [[Eugène Delacroix]].</small>]] | ||
| + | [[Image:Nocturne in Black and Gold, the Falling Rocket, ca. 1875.jpg|thumb|right|200px|[[Fireworks]] as an example of 'squandering' [[surplus product]]. | ||
| + | <br> | ||
| + | Illustration: ''[[Nocturne in Black and Gold – The Falling Rocket ]]'' (c. 1875) by James McNeill Whistler]] | ||
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| - | [[underground economy]] | + | '''Economics''' is the [[Social sciences|social science]] that studies the production, [[Distribution (economics)|distribution]], and consumption of [[Good (economics and accounting)|goods and services]]. The term ''economics'' comes from the [[Greek language|Greek]] for ''oikos'' (house) and ''nomos'' (custom or law), hence "rules of the house(hold)." |
| - | [http://en.wikipedia.org/wiki/{{PAGENAMEE}}] [May 2007] | + | |
| - | The '''underground economy''', '''shadow economy''', '''black economy''', or '''black market''' consists of all [[commerce]] on which applicable [[taxation|taxes]] are being [[Tax avoidance and tax evasion|evaded]]. The market includes not only legally-prohibited commerce (for example, [[drug trafficking|drugs]], [[prostitution]], and [[gambling]] activities that are illegal in some locales), but also trade in legal goods and services because some income is not reported and consequently [[taxation]] is evaded, e.g., through [[money laundering]], payment in cash (which can almost never be traced), or other means. | + | |
| - | The underground economy also includes transactions that governments may ''allow'' to be free of taxation, either by legal sanction or by simply choosing to refrain from enforcement of tax laws in certain markets. The term ''underground economy'' typically is not used to refer to trade in stolen goods, which may more appropriately fall under the definition of the "[[black market]]". | + | One of the uses of economics is to explain how [[economy|economies]] work and what the relations are between economic players ([[Agent (economics)|agents]]) in the larger society. Methods of economic analysis have been increasingly applied to fields that involve people (officials included) making choices in a social context, such as [[crime]], [[education]], the [[family]], [[health]], [[law]], [[politics]], [[religion]] , [[social institutions]], and [[Military-industrial complex|war]]. |
| - | Underground economy transactions are typically [[cash]] transactions to evade traceability by governments or complex [[financial]] operations involving the use of multiple [[subsidiaries]] and [[tax haven]]s. | + | ==History== |
| + | Economic writings date from earlier Mesopotamian, Greek, Roman, Indian subcontinent, Chinese, Persian, and Arab civilizations. Notable writers from antiquity through to the 14th century include [[Aristotle]], [[Oeconomicus|Xenophon]], [[Qin Shi Huang]], [[Thomas Aquinas]], and [[Ibn Khaldun]]. The works of Aristotle had a profound influence on Aquinas, who in turn influenced the [[Scholasticism#Late Scholasticism|late scholastics]] of the 14th to 17th centuries. [[Joseph Schumpeter]] described the latter as "coming nearer than any other group to being the 'founders' of scientific economics" as to [[monetary]], interest, and [[value]] theory within a [[natural law|natural-law]] perspective. | ||
| - | The [[Clearstream]] scandal is an example of such [[tax evasion]]. Based in [[Luxembourg]], Clearstream practices [[financial clearing]], which means it centralizes operations of multiple [[bank|banks]], some based in tax havens. | + | Two groups, later called "mercantilists" and "physiocrats", more directly influenced the subsequent development of the subject. Both groups were associated with the rise of [[economic nationalism]] and [[History of capitalism#Merchant capitalism and mercantilism|modern capitalism]] in Europe. [[Mercantilism]] was an economic doctrine that flourished from the 16th to 18th century in a prolific pamphlet literature, whether of merchants or statesmen. It held that a nation's wealth depended on its accumulation of gold and silver. Nations without access to mines could obtain gold and silver from trade only by selling goods abroad and restricting imports other than of gold and silver. The doctrine called for importing cheap raw materials to be used in manufacturing goods, which could be exported, and for state regulation to impose protective tariffs on foreign manufactured goods and prohibit manufacturing in the colonies. |
| - | Measurement of the size of the underground economy is subject to a large margin of error. Economists seeking to measure its size have often looked at the volume of cash in circulation, although a large part of the underground economy takes place via bank accounts located in tax havens. Discrepancies between the growth of officially reported spending ([[GDP]]) and the growth of cash in circulation may be used to infer growth in the size of the underground economy, but these estimates are subject to a considerable amount of judgement, and are controversial. | + | [[Physiocrats]], a group of 18th century French thinkers and writers, developed the idea of the economy as a circular flow]] of income and output. Physiocrats believed that only agricultural production generated a clear surplus over cost, so that agriculture was the basis of all wealth. Thus, they opposed the mercantilist policy of promoting manufacturing and trade at the expense of agriculture, including import tariffs. Physiocrats advocated replacing administratively costly tax collections with a single tax on income of land owners. In reaction against copious mercantilist trade regulations, the physiocrats advocated a policy of [[laissez-faire]], which called for minimal government intervention in the economy. |
| - | The growth of online commerce may have increased the size of the underground economy. [[eBay]] has over 40 million regular users, including international users. The sellers are legally responsible to pay taxes However, there is no report on how many actually do, and government rarely if ever intervenes to ensure that they do. | + | Modern economic analysis is customarily said to have begun with [[Adam Smith]] (1723–1790). Smith was harshly critical of the mercantilists but described the physiocratic system "with all its imperfections" as "perhaps the purest approximation to the truth that has yet been published" on the subject. |
| - | + | ==Marxism== | |
| - | The underground economy, when trading decisions are not the result of coercion, is arguably a [[free market]], since, by definition, it lacks government intervention. However, various governments have engaged themselves in the underground economy, thus blurring the line between public intervention and its absence. | + | Marxist (later, Marxian) economics descends from classical economics. It derives from the work of [[Karl Marx]]. The first volume of Marx's major work, ''[[Das Kapital]]'', was published in German in 1867. In it, Marx focused on the [[labour theory of value]] and the [[theory of surplus value]] which, he believed, explained the exploitation of labour by capital. The labour theory of value held that the value of an exchanged commodity was determined by the labour that went into its production and the theory of surplus value demonstrated how the workers only got paid a proportion of the value their work had created. The U.S. Export-Import Bank defines a Marxist-Lenninist state as having a centrally [[planned economy]]. |
| + | ==Books== | ||
| + | * ''[[Freakonomics]]'' (2005) by Steven Levitt and Stephen J. Dubner | ||
| + | * ''[[The Wealth and Poverty of Nations]]'' (1998) by David Landes | ||
| + | == See also == | ||
| + | *[[Art world economics ]] | ||
| + | *[[Corporatocracy ]] | ||
| + | *[[General economy]] by Georges Bataille | ||
| + | *[[Invisible hand]] | ||
| + | *[[Military–industrial complex]] | ||
| + | *[[Patronage]] | ||
| + | *[[Perverse incentive]] | ||
| + | *[[Surplus product]] | ||
| + | *[[Underground economy]] | ||
| + | {{GFDL}} | ||
Revision as of 10:13, 13 August 2020
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"Property is theft!" --Pierre-Joseph Proudhon |
Illustration:Liberty Leading the People (1831, detail) by Eugène Delacroix.
Illustration: Nocturne in Black and Gold – The Falling Rocket (c. 1875) by James McNeill Whistler
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Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Greek for oikos (house) and nomos (custom or law), hence "rules of the house(hold)."
One of the uses of economics is to explain how economies work and what the relations are between economic players (agents) in the larger society. Methods of economic analysis have been increasingly applied to fields that involve people (officials included) making choices in a social context, such as crime, education, the family, health, law, politics, religion , social institutions, and war.
Contents |
History
Economic writings date from earlier Mesopotamian, Greek, Roman, Indian subcontinent, Chinese, Persian, and Arab civilizations. Notable writers from antiquity through to the 14th century include Aristotle, Xenophon, Qin Shi Huang, Thomas Aquinas, and Ibn Khaldun. The works of Aristotle had a profound influence on Aquinas, who in turn influenced the late scholastics of the 14th to 17th centuries. Joseph Schumpeter described the latter as "coming nearer than any other group to being the 'founders' of scientific economics" as to monetary, interest, and value theory within a natural-law perspective.
Two groups, later called "mercantilists" and "physiocrats", more directly influenced the subsequent development of the subject. Both groups were associated with the rise of economic nationalism and modern capitalism in Europe. Mercantilism was an economic doctrine that flourished from the 16th to 18th century in a prolific pamphlet literature, whether of merchants or statesmen. It held that a nation's wealth depended on its accumulation of gold and silver. Nations without access to mines could obtain gold and silver from trade only by selling goods abroad and restricting imports other than of gold and silver. The doctrine called for importing cheap raw materials to be used in manufacturing goods, which could be exported, and for state regulation to impose protective tariffs on foreign manufactured goods and prohibit manufacturing in the colonies.
Physiocrats, a group of 18th century French thinkers and writers, developed the idea of the economy as a circular flow]] of income and output. Physiocrats believed that only agricultural production generated a clear surplus over cost, so that agriculture was the basis of all wealth. Thus, they opposed the mercantilist policy of promoting manufacturing and trade at the expense of agriculture, including import tariffs. Physiocrats advocated replacing administratively costly tax collections with a single tax on income of land owners. In reaction against copious mercantilist trade regulations, the physiocrats advocated a policy of laissez-faire, which called for minimal government intervention in the economy.
Modern economic analysis is customarily said to have begun with Adam Smith (1723–1790). Smith was harshly critical of the mercantilists but described the physiocratic system "with all its imperfections" as "perhaps the purest approximation to the truth that has yet been published" on the subject.
Marxism
Marxist (later, Marxian) economics descends from classical economics. It derives from the work of Karl Marx. The first volume of Marx's major work, Das Kapital, was published in German in 1867. In it, Marx focused on the labour theory of value and the theory of surplus value which, he believed, explained the exploitation of labour by capital. The labour theory of value held that the value of an exchanged commodity was determined by the labour that went into its production and the theory of surplus value demonstrated how the workers only got paid a proportion of the value their work had created. The U.S. Export-Import Bank defines a Marxist-Lenninist state as having a centrally planned economy.
Books
- Freakonomics (2005) by Steven Levitt and Stephen J. Dubner
- The Wealth and Poverty of Nations (1998) by David Landes
See also
- Art world economics
- Corporatocracy
- General economy by Georges Bataille
- Invisible hand
- Military–industrial complex
- Patronage
- Perverse incentive
- Surplus product
- Underground economy
