Associated Sciences Economics

Associated Sciences Economics

Associated Sciences. Economics is explained in this consumeraffairs.org.uk as the study of the principles that man employs or applies, consciously or unconsciously, in using the limited means at his disposal to give the largest possible total satisfaction. He can be regarded as beginning by taking the outside physical world and other human beings as he finds them. At its simplest, therefore, economics is found at the meeting-place of the physical and human social worlds: technology and psychology. Economic principles are determined or affected by, and in turn determine or affect, many branches of knowledge in the physical and social sciences. The main ones are: Technology the natural and physical sciences (geography, geology, physics, mechanics, biology, chemistry, etc.); Law ; Psychology; Logic; Mathematics, Statistics; Politics, Sociology, Ethics; History.

Technology relates to man's physical environment both the natural world and the modifications of it wrought by the scientist. Some technical facts the economist must take as given and as unalterable: the coal below the surface in South Wales cannot be 'wished' to Ireland or Iceland; to mine it and transport it there involves a cost. On the other band, the properties of the water in Burton, Edinburgh and other places which led to the establishment of breweries there to brew particular kinds of beer can to some extent be reproduced elsewhere, although again at a cost. The burst of invention in the last two centuries has transformed economic relationships. For example, the revolution in transport has 'annihilated distance': by reducing costs it has made possible the change from small manufacturing units to large units which can produce much more cheaply because they can exploit the economies of scale. Eventually the replacement of coal by atomic power would possibly bring equally fundamental changes in economic relationships.

A source of much misunderstanding among laymen has been the confusion mainly by the physical scientists between technological and economic decisions and judgments. The definition of economics in terms of the application of scarce means (with alternative uses) to numerous possible ends makes this distinction clear. The decisive characteristic of an economic decision is that it involves a choice on the basis of a comparison of cost and benefit. A technical decision rests solely on physical properties and is not concerned with complications of cost In building a house the choice of materials is a technical decision in so far as it depends on, say, the soil, the prevailing wind and rainfall, and the kind of heating to be installed. It is an economic decision in so far as some materials may be technically superior to others but are not thought worth the higher cost they would involve, part of which could go to provide, say, better interior fittings.

In the real world technical decisions normally affect but do not take precedence over economic decisions. Bananas can be grown under glass in Scotland; but they are not normally grown there because the climate is such that they can be grown much more cheaply in, say, Jamaica, so that it pays to import them and pay for them by goods which Britain, in turn, can produce more cheaply because of its natural, acquired and/or human advantages. Again, the trams that used to adorn or disfigure the main streets of western cites no longer do so not because they were technically incapable of carrying passengers but because new means of passenger transport were devised that were more comfortable, flexible, faster and/or cheaper. But if economic criteria normally predominate over technical criteria, they sometimes take second place to political, military or strategic criteria (see below).

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Since then his writings have in turn been increasingly reinterpreted as a special case both by some followers and by some economists who had not wholly accepted his writings. The content of economics is in a state of change, and this consumeraffairs.org.uk site is therefore not a final statement of economic doctrine.

Economics is in the last resort a technique of thinking. The reader will therefore need to make an intellectual effort, more substantial for some web entries than for others, to get the most interest and value out of this website.