Economic scenes

The economy , as a discipline, is a branch of the Social sciences which studies the allowance of the rare resources to fine alternatives. In other words, according to Raymond Barre, economist, “the economic scene is the science of the administration of the rare resources. She studies the forms which the human behavior in the installation of these resources takes; she analyzes and explains the methods according to which an individual or a company affects means limited to the satisfaction of many and unlimited needs”.

Actually, there does not exist only one definition of the economy, but several definitions. Each definition returning to different subjacent realities. Karl Polanyi distinguished for example two directions from the economic term: the substantive direction (the economy is an empirical science which studies institutionalized lawsuits) and the formal direction (the economy is a deductive science which study the rational action); this last direction approaches much the design that Ludwig von Mises had some.

Robbins Burling enumerated as for him five manners of defining the economic scenes:

the study of the things which the economists study.
the study of the average materials of existence of the man.
the study of the Production, the Distribution, and the Consumption of the goods and the service S.
the study of the systems of exchange whatever them Structure.
the study of the allowance of the rare means to fine alternatives.

Origin of the concept

Économique is a Greek word which seems titrates of two treaties, one of Xénophon, the other of Aristote, whose object is the knowledge and the formulation of the laws (“nomos”) making it possible to optimize the use of the goods of a house (“oikos”), considered as collective unit of production of a widened family or a clan. Richness is considered from the point of view of abundance of goods produced and of their utility, not of accumulation of money by wear or trade of which processes make object of another discipline that Aristote calls Chrématistique ( khréma - atos ) and that he regards as sterile activities, even dishonouring in the Éthique in Nicomaque ). The Économique is explicitly distinguished from the Politique , which is the subject of another treaty of Aristote and aims at establishing the harmony and justice between the various classes of people and families which constitute the city.

The term economy is not opposed to luxury but to wasting : it indicates the addition of richness coming from the optimization of the use of human resources and natural employees in the production, the distribution and the renewal of the goods necessary to the existence of a company or a person. By extension, economy currently indicates all the production process and of distribution of goods and services of an area or a country; one calls worldwide economy the system of the commercial and financial exchanges international.

A microeconomic definition

The choices of the actors are carried out according to the opportunity costs. By opportunity cost, it is necessary to hear the value of the renouncement. Like higher statement, it is difficult to give a rational definition to certain economic concepts, because there are as many authors as of definitions. But, in a définitionnelle approach, the Microéconomie is the part of the economy which studies the individual behavior of the economic agents, it treats questions such as the richness and thus the profit, energy necessary for an industry, poverty etc…

In addition, a Economic agent designates any moral person or physics who takes part in an activity of Consommation, of Production or saving.

A macroeconomic definition

The Macroéconomie is the study of the economy under consideration in its globality, in the form of aggregates. She studies the choices of the individuals (all and not only one), of the Entreprise S and the Gouvernement S on the economy Nationale and Mondiale.

The macroeconomic analysis studies in particular the relative questions with indicating, representative of economic health: Gross domestic product and rough National revenue, total consumption, saving, Investment S, Inflation, Unemployment rate, Indicating of human development, Poverty line,…

By the National accounting, it is part of the political economy in the vast field of the political Philosophie and the Anthropologie.

The international economy, which studies the economic relations between countries and certain characteristic of the economic Mondialisation, belonged to the Macroéconomie.

The place of the economy in the company

Role and responsibility for the economists

The role of the economists is on the one hand to analyze how the human society produces its Richesse S and distributes them, and on the other hand to propose explanations and possibilities for improvement to certain economic and social dysfunctions. They can also make studies to estimate the effects of a Loi or a Bill. The results of these studies (which can be contradictory from one model to another) are sometimes used by the Gouvernement S to control the economic activity.

The economy thus has bonds with the political Philosophie, and it has a considerable Enjeu Social, in particular with regard to the distribution of the richnesses in the company.

For this reason the responsibility for the economists makes question: if their proposals are so important for the company, do they have to be held for person in charge in the event of failure? Hayek expressed it by writing that an economist who is not that economist becomes harmful and can constitute a true danger .

Ecological stakes

Since the end of the 20th century, the economy has also a ecological Enjeu . Indeed, impact of the human activities on the Natural resources (Deforestation, fossil energies, Ore S) and on the balance of the planet (Climate, Biodiversity…) put the question of the Sustainable development. Reciprocally, ecology becomes a economic Enjeu, by the activity which it generates (Recyclage, Dépollution, etc).

Reflections are in hand, in the field of the environmental economics, to integrate the measurement of the linked activities into these stakes in large the Agrégat S economic (GDP, etc), in the form of Externalité S.

The taking into account of the ecological interests and the damage of the economic activity on the environment becomes a major stake in the choices of investments and the policy of innovation and long-term employment. The States which begin on the multilateral level to reduce their emissions of CO₂ set up regulations to encourage the companies and industries to be invested in nonpolluting technologies and to reconvert themselves into sober sectors in consumption of energies.

Study

Methodology

Like the majority of the social sciences, the economy can approach its object from two complementary points of view: it is known as

positive when it attempts to explain the consequences of the various choices and to describe the reality of its object.
normative when it prescribes an action, a measurement or a route to follow.

One finds other share different methods used by the economists to test or build their theories. Most significant are undoubtedly:

the econometrics, which applies the mathematical techniques, statistical and probabilists being studied of the economic situation.
the experimental economy which on the contrary studies the economic Motivation S “in laboratory”, near small groups and joined thus the behavioral economy.
historical approach.

The economy for a long time makes (since the physiocrats) a broad use of mathematical model . This use of the models, for the economists, is made necessary by the great number of data which they have to treat, and by the will to draw some from the general laws. The economists think thus that the mathematical methods would encourage the researchers to concentrate on essence, and would make the exposure less prone to ambiguities.

To note, holding them of the Austrian School, for epistemological reasons, adopts a step radically different, from axiomatico-deductive type, and refuses to resort to any mathematical modeling.

Fields of study of the economy

Certain aspects of the economy require an special attention: the Trade, the Allowance of the resources, the Competition and the Currency.

More generally, the economy is often divided into two main categories:

the Microéconomie, which treats behaviors and Interaction S between the Economic agents (households, companies, administration, associations);
the Macroeconomics, which examines an economy like a unit, while trying to include/understand the Interaction S between the various aggregates which are the Revenu, the Immobilizations (body or incorporeal), the Emploi, the Investissement, the saving, etc

The attempts at meeting of these two branches were one of the main motors of the contemporary economic thinking, during the Années 1970 and the beginning of the Années 1980. Today, a consensus seems to be formed in the orthodoxe economists around the idea that the Microéconomie constitutes the base of the Macroéconomie. This idea however is very disputed. For example, a certain number of specialists in economic epistemology, like Claude Mouchot for example, refute this idea in a categorical way.

Within these great divisions, one finds zones of study more specialized, which try to answer the questions from the point of view - broader - human activity.

Little by little, the economic theories found applications in contexts much vaster. Indeed, one can consider that in any field where the individuals are confronted with choices - education, the marriage, public life, etc -, one can find an economic aspect. The theory of the public Choix (public choice theory) studies how an economic analysis can apply to fields traditionally considered as foreigners with this field. And, in fact, the fields of investigation of the economy overlap those of other social sciences, such as the social Psychologie, the Politique, or the Sociologie.

Thus, an important aspect of the economy is the study in the way in which stimulative (consequences of various actions) can affect the behavior of an individual or a group. The economists think that the personal stimulants and tastes play a big role in the preparation of decision making. Thus, psychology, sciences cognitive and neurology join the economy and are used to him as matter with reflection.

The great questions which the economic theories endeavor to answer

What the Richness? How is it distributed? Why? How to make evolve/move this distribution? How to increase the richnesses? is
Which the value things? The Value of work?
Comment does one measure the Production? The Consumption? Who produces? How?
What a Resource? How to ensure the continuity of production with Resource S limited? How the Natural resources intervene do in the contemporary economies? is
Which the difference between a material Actif and a immaterial Actif? How the immaterial Actifs contribute do to the Richesse?
Comment the Externalité S influence do the production of Richesse? GDP is a relevant measurement of the Economic growth? is
Which the difference between measurement of the Importation S and the Exportation S on a each scale Nation Européenne and on the scale of the European Union? is
Which the nature and the origin of the Monnaie? is
Which the statute of the Propriété? Is this a natural Right? A form of flight? A contingent or conventional phenomenon?

Development of the economic thinking

The economic thinking finds its origins in the Antiquité, in particular in ancient Greece (see economy of ancient Greece). This paragraph describes the developments of the economic thinking starting from the Renaissance.

Developments at the beginning of the modern time (XVI {{E}} - 17th centuries)

Joseph Schumpeter, in his History of the economic analysis (1954), studied the doctrines Scolastique in general and Spanish in particular. It spoke in praise of the high level of the economic scenes in Spain with the Renaissance. According to him the school of Salamanque was the group which deserves more the title of founders of the economic scenes.

The modern economic thinking then developed with the XVI {{E}} and 17th centuries with the Mercantilisme. These economic doctrines preach the Economic development by the enrichment of the Nation S and the State, or sovereign sound in particular, by means of the foreign trade (the word comes from Italian “mercante” which means “commercial”) but also of industrialization. It is located historically at the end of the Moyen-âge and marks also the end of the preeminence of the doctrines of the Church in the social organization. She rests on the belief which the richness rests on the accumulation of the noble metals; she thus recommends to develop the industrial activity and the Exportation to obtain the gold and the money which represent the richness of a country. The State must give the example by creating great activities, for example Manufacture S. Notamment the France which shows an important official interventionism (control of the Production to ensure the quality of the products) with an aim of exporting many luxury items. Spain which has at the time a great quantity of gold, thus contributes to the enrichment of France.

The French mercenary attitude is represented by men such as Jean Bodin (1530 - 1596), Antoine de Montchrestien (1575 - 1621) or Jean-Baptiste Colbert (1619 - 1683).

Preclassical and traditional (XVIII {{E}} - 19th century)

The current of the Physiocrate S constituted only one short stage of the economic thinking. The physiocrats support that there exists a natural order controlled by laws (physiocracy means government of the Nature). The role of the economists is to include/understand and reveal the natural laws such as they operate in the company and the economy in order to show how these laws operate in the formation and in the distribution of the Richesse S. Fondée on the idea that only the ground and the Agriculture would be creative of richness, physiocracy will have a rather short existence, as of 1776 being eclipsed by the emergence of the traditional thought and the publication of the Recherche on the nature and the causes of the richness of the nations of Adam Smith. The Economic Table (1758) of François Quesnay, principal representing Physiocracy will have a broad posterity however, because for the first time the economy is presented in the form of flow of goods and services. This representation will be taken again and detailed by all the posterior economic movements.

At the 18th century developed especially the traditional thought, around first of all of Daniel Bernoulli (creative as of 1738 of the fundamental concept of Utilité), then of two British, Adam Smith and David Ricardo. Traditional English seeks to include/understand the dynamics of the growth in the context of the incipient Industrial revolution: they insist at the same time on the role of work in the creation of the wealth (concept of “Valeur work”) very of underlining their attachment with the Economic liberalism and their belief in the need for a strong accumulation of the Capital and for a judicious distribution of income to support the Economic growth.

At the 19th century, the economic thinking in particular developed with the contribution of Karl Marx. The modern economy is in fact before a whole refinement of the neo-classic economic thinking (see Histoire of the economic thinking for an outline of the precursors of Adam Smith, as of the various schools which succeeded to him).

Diversification of the thought (20th century - 21e century)

John Maynard Keynes gave rise to the Macroéconomie in the Années 1930. Many economists use a neo-classic mixture of Microéconomie and Macroéconomie keynésienne. This combination, sometimes called neo-classic synthesis , was popular in teaching and was especially largely applied in economic policy in the Western countries after the Second world war and until the end of the Années 1970. In the same way, of many authors claim thought of Karl Marx while refuting to be Marxist, with the political or economic direction more running. However the theories keynésiennes present the disadvantage of causing Inflation, indeed this one tends to support the request.

With counter-current of the dominant theories, one finds the theory of the social Crédit of Clifford Hugh Douglas which developed its theory in the Thirties.

Nowadays, one notes a great diversification of the economic currents, in particular by the application of technical new approaches:

the quantitative economy, one of the supports of the econometrics, using techniques of modeling derived from physical sciences,
the experimental economy applied in particular to the Microéconomie,
the behavioral economy, born in particular from the study of the anomalies from the financial markets and psychosociological factors which cause them.
in the same way, the Socioéconomie and the Neuroéconomie, born from crossings between the cognitive economy and sociology and sciences.

In addition, the rise of the Sciences of management (Management, Marketing, Théorie of the organizations, management of the human resources, Technologies the information) percolé in economy, leading in particular to the economy of the knowledge, which recognizes the knowledge, competence and information as crucial factors of production and development, in addition to the three “traditional” factors: natural resources, work and capital.

Recent prospects

Also let us note, on a purely more anecdotic basis, the contribution of Howard Rheingold (author of the book Smart Mobs). This author thinks as Marx that the economic systems are the consequences of one time the technological and social conditions (“modes of production”, in Marxist terminology ), but in car of the very different conclusions: if the Marché S created the concept of Capitalisme and the industrial society of the 19th century, maintaining the conditions new of production created by Internet (inter alia the file-sharing) change gives it economic and are a prelude to with the appearance of new economic systems coexistent with the Capitalisme and the Socialisme, sometimes in competition with them. Movements like that of the Open source with the GNU and Linux, as well as the skirmishes which multiply about the file-swapping MP3 and DivX would be according to him the harbingers.

The economy of the knowledge seems to be located from this point of view of a change related to the new forms for diffusion for the Information and Connaissance S which offer the Technologies information and the communication and of Ingénierie of knowledge.

The Chinese economy turns also very recently to the economy known as circular. In opposition to the linear economy which would be conceived like processes being connected in a linear way, the circular economy is the fruit of the Interaction S multiples generated by the Economic agents in the economy of the knowledge.

It is necessary however to keep in mind that the exemption from payment of the present could sometimes be source of profit in the future: they are often individual or associative initiatives, but sometimes also of capitalist groups which create for themselves new customers, profitable in the future; it thus is not about an economic material innovation.

Presentation of the orthodoxe economy

See the detailed article: Orthodoxy and heterodoxy in economy

The economy is built today around a paradigm dominating. One speaks to indicate the work built inside this paradigm, of orthodoxe economy . This paradigm leaves the following basic principle: the resources are in limited quantities , and it is thus necessary to choose how to employ them as well as possible. In situation of scarcity, the choice of an alternative indeed implies the renouncement of the other possible alternatives; it is what the economists name the Opportunity cost . Moreover, limited resources cannot, at a moment given and in a technological context given, to lead that to a limited production, which poses the problem of the Redistribution products.

According to this principle, there exist two possibilities to calculate the utility of the resources which will be employed.

In the traditional tradition, the economist considers the cardinal Utilité of a resource. The consumption of a good exempts a certain level of satisfaction according to a certain function of prédonnée utility, and the agent chooses to consume the resource or the level of resources, which gives him more the high level of satisfaction.

The difficulty is however to measure this level of satisfaction, this is why the neo-classic economists rejected this assumption and suppose from now on that the consumer has only the possibility of classifying the various goods according to his preferences. According to the structure of the preferences of the economic agent, they build then, when it is possible, a function of utility. In the models of inspiration walrasienne, one then seeks the allowance of the resources, or the allowances, such as no individual can increase his satisfaction without deteriorating that of someone else. It is said whereas they are paréto-optimal allowances. The distinction is the following one: compared to state given of economy, if it is possible to find an allowance which increases the level of satisfaction of an actor without decreasing that of another, then the economy is not in a situation known as of Pareto's optimum (of the name of Vilfredo Pareto, Italian sociologist of XIXe having theorized this concept). On the other hand, if such an allowance is not realizable, the current allowance is optimal within the meaning of Pareto.

It should then be noticed that an paréto-optimal allowance at all does not imply a levelling distribution of the resources. Part of the role of the orthodoxe economists is thus to determine which are the measures to be taken so that the economy is in an paréto-optimal situation, without inevitably taking account of ethical criteria of redistribution which concern the policy option. In general, according to the nature of the individual preferences and the nature of the goods (public, private), they recommend a decentralization of the decisions and exchange, and an indexing of the goods by a system of price. Part of research also relates to the way in which the situations oligopolistic and monopolistic draw aside a saving in its paréto-optimal state, and how it is possible to restore the efficiency. These models are thus enough for the neo-classic economists to draw the conclusions on the economic measures to take.

Epistemology

Quotations

Edmond Malinvaud: " the economy is the science which studies how the rare resources are employed for the satisfaction of the needs for the men living in company; it is interested, on the one hand, with the operations essential that are the production, the distribution and the consumption of the goods, on the other hand at the institutions and the activities having the aim of facilitating these operations ".
Jean-Baptiste Say: " the economy is the science which teaches how are formed, distributes and consumes the richnesses which satisfy the needs for the companies " (Political Treaty of economy, 1803).
Alfred Marshall: " the political or economic economy is a study of humanity in the ordinary businesses of the life: it examines the part of the individual and social life which most particularly milked with the acquisition and the use of the material things, necessary to the wellbeing. It is thus on a side, a study of the richness, other and it is most important, it is part of the study the man. " (Principles of political economy, 1890)

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