THE SCIENCE OF ECONOMICS

Economics, like physics or meteorology, is a science to the extent that it comprises a set of analytical principles that work with consistent regularity. Unlike the so-called natural sciences, however, economics is a social science because it studies human behavior rather than the disembodied workings of nature. Thus it is appropriate to describe the subject, by analogy, as a set of tools. Just as a carpenter’s tools may be used to build a house, a printer’s tools to make a book, so an economist uses tools to build understanding – in this case, understanding of human behavior and its consequences. Each social science makes the same claim, however. So what distinguishes economics from its “sister” social sciences, such as sociology or psychology? The unique feature of economics is that it studies human behavior within the context of markets. A market is an institutional arrangement that fosters trade or exchange. Modern economics, therefore, is the study of how markets work – of how value is determined, and how inputs relate to each other in production, for example. But there is a larger set of questions involved: where did the market come from? Is it the only way to organize economic activity? What are its alternatives? How might they work?

The history of economic thought is replete with writers who sometimes addressed the former set of questions (i.e. how markets work) and sometimes the latter (what are its alternatives). Occasionally, but rarely, a writer will address both. Marx was such a writer. Most of the writers who achieved lasting fame as architects of the discipline of economics stuck to the former set of questions, however. So dominant was this tendency that it may be termed mainstream, or orthodox. By contrast, attempts to explore the second set of questions are typically regarded as unorthodox, or outside the mainstream. Surely the market place of ideas encourages variety.

Although others might present the subject differently, the important point that should be derived from any historical survey of the subject is that economics is a vibrant form of intellectual discourse, not a set body of principles.

Even in this new millennium, there is increasing evidence that economics continues to ferment. Even among mainstream economists, gnawing questions persist about the nature, scope and method of economic inquiry, and the value and place of economics among competing social sciences. Disagreement persists about the proper boundaries of the subject, the role of the individual versus the group, the method of analysis to be employed, and the usefulness of the field itself.