Economics
From The Art and Popular Culture Encyclopedia
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"Property is theft!" --Pierre-Joseph Proudhon "To avoid the ecocalyps, the economy needs to charge all externalities to the producer."--Sholem Stein |
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.
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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
- 1776 An Inquiry into the Nature and Causes of the Wealth of Nations (or The Wealth of Nations) by Adam Smith, a Scottish economist, discusses political economy, merchantilism, free trade, division of labor, the Industrial Revolution, the work of the Invisible hand in the free market, and defends capitalism. Some consider it to be the first modern work in the field of economics.
- 1817 On the Principles of Political Economy and Taxation by David Ricardo, discusses the controversial economic topics of land value, economic rent, comparative advantage, free trade, and the economic principle of absolute advantage.
- 1867 Das Kapital by Karl Marx expounds upon the subject of political economy and is very critical of capitalism.
- 1936 General Theory of Employment, Interest, and Money by John Maynard Keynes, an English economist, is credited with creating the field of macro-economics and emphasized government-oriented management of the aggregate level of demand in the economy.
- 1980 Free to Choose by economists Milton and Rose D. Friedman advocates that the economic forces of supply and demand (a.k.a. "the free market") are better at solving problems than government-oriented approaches. Friedman is a Nobel Prize winner in the field of Economics and is a retired professor from the University of Chicago.
- The Wealth and Poverty of Nations (1998) by David Landes
- Freakonomics (2005) by Steven Levitt and Stephen J. Dubner
See also
- Art world economics
- Corporatocracy
- General economy by Georges Bataille
- Invisible hand
- Military–industrial complex
- Patronage
- Perverse incentive
- Surplus product
- Underground economy
