Politics Sociology Ethics
Politics, Sociology, Ethics. Politics is the science of the relationships between citizens and the state. Sociology is the study of human society in groups .families, communities, institutions. Ethics is the science of the moral nature of human character and conduct.
A course of action that may be indicated on economic grounds (a comparison of costs and benefits) may be judged unwise on political, sociological or ethical grounds. For example, Adam Smith in The Wealth of Nations declared: 'Defence is of much more importance than opulence'; protection for agriculture raises the price of food to home consumers but it may be regarded as an insurance premium in the event of a war cutting oft outside supplies; the Premium Bonds have stimulated saving in a period of inflation, but they may be considered immoral by giving official blessing to a form of gambling.
Economics is a behaviourist, not a normative, science: it is concerned not with what should be, but with what is, and why. It studies the behaviour of man in activities which find expression in the market, that is, in prices and values. The essence of economics is explanation of the phenomenon of value. But it is not concerned with value judgments with saying what should be. That is the province of politics or sociology or ethics. Politically or morally it may be desirable that all men shall be fully employed; ethically a school may be judged preferable to a cinema or a public house. These are value judgments with which economics is not concerned; its concern is only with the causes and repercussions of over-full or under employment, with the relative cost of building schools, cinemas and public houses.
Economics measures and compares values and costs as shown in the market, in so far as they reflect general consumer preferences. The economist can show which means of achieving given ends is the most 'economic', i.e. involves the least cost or sacrifice of other things; but he does not say, as an economist, that the most economic method should be adopted: economy is only one purpose of human conduct, and it may conflict with what is considered good or beautiful or true. But economics does help the best value judgments to be made, because it reveals the real relative cost of, say, preferring beauty to economy, or economy to security. The economist may have value judgments of his own, e.g. he may think it unwise to sacrifice cheap food in peacetime to the doubtful risk of war, but he has no authority in economics for his view, although his science may enable him to arrive at a more dispassionate and more informed judgment than some other people.
History. Economics as the study of mankind in business life has its counterpart in the economic history which describes the development of farming, manufacturing, transport, banking and so on. Economics as the science of the human disposal of scarce resources has its counterpart in the developments produced by scarcity down the ages. This approach to history studies, say, the inventions of the late eighteenth and early nineteenth century not as technical developments (this is the history of science), or for their effects on company structure (legal history), or the extension of the franchise (political history), but for theft effects on the supply of and the demand for the factors of production that went into their manufacture and the supply of and the demand for the goods and services they produced.
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