Talk:Economics/Archive 6

Macro sections
Each of the four sections under Macroeconomics seems underdeveloped to me, filled with little more than links to incoherent selections of related articles and trivialities (e.g. vacuous quotes like "Money is what money does") instead of actual summaries. Does anyone have any advice about improving them? I am thinking of pulling some of the introduction sections from the corresponding main articles, and adding more subsections to more completely cover macroeconomics. One of the things I'm most worried is missing is the idea of emergent properties of collective decisions made under constraints varying in common, which is what sets macroeconomic behavior apart from microeconomics. 71.212.240.142 (talk) 17:12, 26 August 2012 (UTC)

economic thinking in the "Schumpeter gap" source dump
This source probably has better uses in the history pages but I'll dump it here may someone could use it. J8079s (talk) 02:57, 2 July 2012 (UTC)

Unemployment and effective tax rate
I tagged the recently added section on unemployment with an OR warning. The second paragraph is OR heavy. The section makes it seem like effective tax rate is a major factor in unemployment. Most of the cited sources don't make any mention of effective tax rate at all, and the one that focuses on tax rates doesn't connect them to unemployment. This section is clearly an OR synthesis. The section also contains statements like that are not supported by the sources and not true like "all profitable businesses in a jurisdiction face the same decision based on the same effective tax rate." Effective tax rates vary widely among businesses. I removed a similar addition to Macroeconomics, but left it here for others to weigh in.--Bkwillwm (talk) 18:46, 9 September 2012 (UTC)
 * I am working on finding some better sources. I think the sources do support the gist, but I agree they are not very direct for the phrasing. I will get the full text of and  to see if they are better. You are right that the "same effective tax rate" statement is completely wrong and I will fix that right now. &mdash; Cup co  19:28, 9 September 2012 (UTC)
 * ...moving the paragraph here while I work on sources:

Different types of unemployment involve different causes, but there are some causes common to all unemployment. Chief among these common causes is a lack of sufficient aggregate demand for labor. While a large variety of different factors can reduce aggregate demand for labor, macroeconomic threshold factors have recently become of interest to policymakers. One such factor of particular recent note concerns decreases in the effective tax rate (for example, when tax shelters such as tax havens become more widely available) which cause the expected return on investment from hiring new employees to fall below net return from paying tax on profits, leading businesses to choose to bank their profits instead of investing them in hiring. Since all profitable businesses in a jurisdiction face a similar decision based on similar changes in the effective tax rate, the combined macroeconomic effect can be quite large, and feed back via consumer spending into the aggregate demand, lowering the expected return on investment in labor even further. Under those conditions, profits and bank deposits will sharply increase simultaneously with a similarly sharp drop in employment, as was the case in 2007-2012 in the U.S.


 * new references


 * obsolete and unused sources
 * Jarass and Obermair (2006) is good except it talks about exporting jobs instead of reducing employment, which is the same thing on the inside, but I may be able to do better. Cragg et al. (1967) has what I want but it's expressed as a formula in a footnote. &mdash; Cup co  22:45, 9 September 2012 (UTC)
 * goes through it step-by-step but doesn't qualify as a reliable source (except perhaps by way of WP:CALC, which only qualifies in the absence of controversy so that probably won't work either.) I've requested  which looks promising. &mdash; Cup co  00:31, 10 September 2012 (UTC)


 * incorporated and extra colloquial sources
 * BINGO - a solid, recent WP:SECONDARY literature review from a half century old organization in a free full text chapter reviewed by the 11-member ILO Experts Group. Similarly in Appendix A of the 2012 volume "income taxes also revealed a positive and highly significant relationship with employment". Here's a great graph from WaPo/BLS/TPC/CAP to illustrate the long term data. I'm replacing the text with those improved references. is another WP:CALC argument from a blog but it's perhaps easier to follow and from last month, and has an econ prof "mbperrin" saying he's been teaching the concept for two decades.  goes into more prosaic detail but is self-published; it might be a good source of search phrases.


 * balance opposing point of view
 * Which are the best sources to use to show the opposing view? &mdash; Cup co  20:54, 10 September 2012 (UTC)


 * I think there are still many problems with the addition. I don't see any support for the statement cited in Yellen "Different types of unemployment involve different causes, but there are some causes common to all unemployment. Chief among these common causes is a lack of sufficient aggregate demand for labor." It would help if you used page numbers in your citations, but I don't think the article supports your statement. The main point of efficiency wage theory is to explain why unemployment can exist outside of demand factors. The phrase "aggregate demand for labor" is wrong (aggregate demand, by definition, includes more than the labor market). Regarding the effective tax rate issue, I think you are going to run into undue weight issues.  Both this article and macroeconomics are very high level articles, so space has to be used sparingly.  If you have to go digging deeply to support a point, it's unlikely that it is a significant fact about general economics. It's also a negative statement (That tax rates are unrelated to unemployment), which is out of place without a positive statement to refute. Why waste space talking about a non-relationship? The statement "Under those conditions, profits and bank deposits" still has synthesis issues. Stiglitz doesn't connect unemployment with tax issues as you imply. The statement "macroeconomic threshold factors" is unclear in your text, and the FOMC statment is referring to the thresholds of a monetary policy rule, not any factor that would directly effect employment. I'm not sure where you are trying to add to this article, but you would be better off finding good sources and working from them instead of rounding up a variety of sources to back up text you want to add.--Bkwillwm (talk) 01:57, 11 September 2012 (UTC)


 * I am interested in this line of reasoning. Why is it a negative statement? Is there a cause suggested for unemployment? I came here from Unemployment which does not exist any more. Is efficiency wage theory the study of the cases where the particular cause of greater income equality does not hold? Vilonermo (talk) 17:07, 12 November 2012 (UTC)


 * Fair enough. I am sure I can address each of those points. I believe that the hegemonic view that lowering taxes stimulates employment is utterly without evidence, primarily because the tax rate has been far below the peak of the Laffer curve since the 1960s to present in the US. While that idea is not difficult to source, explaining the dynamics is. But looking at labor economics publications has been a great help and I'm certain I'll be able to do it. I am not trying to make a negative statement: Tax rates clearly are related to unemployment, just in the opposite way that the vast majority of people believe is the common wisdom, utterly without supporting data, and the way that non-labor economists usually assume; again, writing as if it's a given without a hint of support. Since the employment ratio vastly influences consumer spending which is the dominant form of demand in most industrialized economies now, proper representation of the factors which influence employment may be among the most significant facts about general economics, especially when they are contrary to false dominant views. &mdash; Cup co  17:53, 11 September 2012 (UTC)


 * By the way, the reason I cited the efficiency wage paper in support of the statement that lack of sufficient aggregate demand for labor is a universal common cause is because it shows that employment can change while aggregate demand is constant, but all other things equal, more aggregate demand will tend towards more employment. The source for threshold effects is simply to show that policymakers are looking at them as distinct from elastic effects, but I agree having a source about fiscal instead of monetary policy would be superior. I'm looking. I want to get better papers like those below, first. &mdash; Cup co  00:33, 16 September 2012 (UTC)


 * I'm still working on additional sources. I've looked through all kinds of econ theory, and it's in there, but what I really need is something peer-reviewed that more closely formalizes the actual employer costs described in and . The Stiglitz interview depends too much on Okun for there to be a connection, so I'm working on that, too. &mdash; Cup co  05:32, 17 September 2012 (UTC)


 * Currently looking at, , and trying to find the CRS report mentioned in .... &mdash; Cup co  02:51, 18 September 2012 (UTC)


 * Just a quick comment on something said above: you have to be careful, the Laffer curve and unemployment are two separate things. If you're deriving the Laffer curve from the labor market tax rate, then employment effects, in the form of lower labor supply will exist for any positive tax rate (assuming labor supply is not perfectly inelastic), regardless of which side of the peak of the Laffer curve you're on. There's also a difference in unemployment and lower labor force participation rate. In the presence of other market distortions a tax on wages can increase existing unemployment but it cannot cause it by itself.  Volunteer Marek   17:15, 12 November 2012 (UTC)

Economics is...
The first introductory sentence on what economics is is not entirely correct. Economics is primarily the social science of dealing with material scarcity. All that talk about it "analyz[ing] the production, distribution, and consumption of goods and services" is just the means by which it goes about doing that.

I would like to get people's thoughts on this instead of simply and unilaterally changing it. Discott (talk) 11:42, 17 March 2013 (UTC)
 * A quick update, if no one gets back to me within two months I will likely 'be bold' and go ahead with the aforementioned amendment. I have noticed that this talk page is frequented by a bot that cleans up old articles every three months or so and I don't want this to disappear into the archives. --Discott (talk) 14:35, 20 March 2013 (UTC)
 * Could you be more specific about what you want to change it to?Smallman12q (talk) 15:41, 20 March 2013 (UTC)
 * The first sentence. Change it to something along the lines of : "Economics is a social science that looks at how individuals and groups of people manage scarce resources to produce goods and services and distribute them amoung various persons and groups." It could be even more concisely said to be "the social science of managing scarcity."--Discott (talk) 20:46, 31 March 2013 (UTC)

The suggested change is a even more retrograde than the present one. Economics has a deep history; and several definitions rather than one would be most appropriate. The classics, Smith, the Physiocrats, Ricardo might be happier with "material basis of social reproduction;" but not completely happy as any labor economist will explain. If you want to keep the conservative tone, a review and sourcing of 19th and 20th century texts would be more appropriate. Otherwise, opening a page on definitions of economics. Calitrir
 * You raise a good point Calitrir. Focusing on a more general type of scarcity that is more inclusive of labour (a ver important and limited 'resource'/input) and possibly even creative and entrepreneurial inputs (although it is much harder to argue that these are scarce) might be a better definition than one that simply focuses on material scarcity. I think I will need to find some time to look through some references on the matter. I recall seeing a number of economics text books discussing this so I will look there when I can. --Discott (talk) 19:54, 23 May 2013 (UTC)

Economics is about the science on turning scarcity to unlimited resources for overall needs
Macroeconomics (for in-depth analysis and proper implementation of Macroeconomics, see 1, 2, 3) requires management, trade, technology (including renewable energy), transparency, legal system, market research, banking (for saving) and finance (for distributing/investing capitals), infrastructure, transportation, human resources, design and sustainable demand and supply (with specific areas of economic interests to be targeted by the firms with different specialization/expertise and professionalism) for economic growth to be protected by the rule of law in contracts and the enforcement of economic liberalization for continual Marketing operations of industrial organization and business organization in the market economy to learn what kind of product management needs to be done on the Manufacturing process management on the basis of enterprise resource planning and Business process reengineering (for more about Microeconomics development, see Fortune Global 2000 list). (114.36.103.195 (talk) 09:38, 3 November 2012 (UTC)) BULLSHIT — Preceding unsigned comment added by 94.201.198.178 (talk) 17:28, 24 March 2013 (UTC)

Top corporate tax bracket and unemployment in the US
I was asked to look at some recent deletions on the US deficit article. Now my questions are mostly about and  mentioned above. Has a tax professional had a chance to look at those and say whether or not they are correct? Pltr6 (talk) 18:07, 13 November 2012 (UTC)


 * Along the same lines, I would like to point out that this graph File:Employment growth by top tax rate.jpg was removed from this article.  It is referenced information, and the person who removed it agrees that the reference is a reliable source.  It was removed on the grounds that it gave undue weight to the top marginal tax rate.  On the other hand the current claim in the article, which mentions first that the cause of unemployment may be that "Wages may be too high because of minimum wage laws or union activity." is entirely unreferenced. Rick Norwood (talk) 21:41, 13 November 2012 (UTC)
 * I changed the image you embedded to a link to improve formatting. Hope you don't mind. Regarding the "minimum wage/union" statement. Feel free to tag or remove uncited information.--Bkwillwm (talk) 23:40, 13 November 2012 (UTC)
 * While I suppose it probably is true that top marginal rates have little correlation with job growth, File:Employment growth by top tax rate.jpg is a horrible piece of prevarication, and anyone using it should have an Edward Tufte book thrown at them. Herostratus (talk) 20:04, 14 November 2012 (UTC)

I assume your point is that correlation is not causation. That is true. But the correlation here is very strong, and at least suggests that something is going on. Surely economists have written on this subject. Rick Norwood (talk) 20:57, 14 November 2012 (UTC)
 * What else causes both job creation and additional tax revenues other than growth? This is the same graph as the Laffer curve, which ironically is the largest 3/5ths frowny face mouth in history. Pltr6 (talk) 21:27, 14 November 2012 (UTC)

You seem to misunderstand the graph. It is not about additional tax revenues, but the top tax rate. If a high top tax rate spurs economic growth, that is certainly of interest. Rick Norwood (talk) 23:02, 14 November 2012 (UTC)
 * Please see this description of Art Okun's mistake in 1975 (especially Chart 4) in which Okun used year-over-year correlations instead of run lengths which is why the IMF recently radically reversed their position on austerity and many commentators suggest they did not go far enough.
 * What governs income inequality more than the top effective tax bracket rate? 199.16.130.122 (talk) 05:48, 15 November 2012 (UTC)

I hope someone, preferably someone with a degree in economics, will rewrite this article to reflect that information. Rick Norwood (talk) 12:13, 15 November 2012 (UTC)
 * I hope someone will start with the basics here and on the Unemployment article (both of those are from .) 71.215.79.206 (talk) 00:15, 19 November 2012 (UTC)

Opening Paragraph
M&Ms says:

The opening paragraph (second sentence) says that "The term economics comes from the Ancient Greek οἰκονομία (oikonomia, "management of a household, administration") from οἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the house(hold)".

The reference is incorrect. The link provided directs to the etymology of the word Economy, not Economics. — Preceding unsigned comment added by 112.155.12.213 (talk) 02:35, 25 January 2013 (UTC)


 * The close relationship between the two words is obvious. Rick Norwood (talk) 12:44, 25 January 2013 (UTC)

M&Ms says:

Please see these two references (to be viewed in the following order; top first, bottom second):

http://www.etymonline.com/index.php?term=-ics&allowed_in_frame=0 http://www.etymonline.com/index.php?term=economics&allowed_in_frame=0

This relationship is obvious — Preceding unsigned comment added by 112.155.12.213 (talk) 18:08, 27 January 2013 (UTC)

M&Ms taunts: Yo Ricky...what did the five fingers say to the face? — Preceding unsigned comment added by 118.41.6.207 (talk) 07:45, 31 January 2013 (UTC)

Edit request

 * Please add the following to the end of the "Supply and demand" section:

Increasing business profits do not necessarily lead to increased economic growth, especially when they do not result in greater aggregate demand. When businesses and banks lack incentives to spend accumulated capital, for instance because of repatriation taxes from profits in overseas tax havens, or interest on excess reserves paid to banks, increased profits can lead to decreasing growth.


 * Thanks. Neo Poz (talk) 00:43, 13 February 2013 (UTC)
 * ✅ Camyoung54   talk  20:47, 13 February 2013 (UTC)
 * Thanks again. If you haven't already, you'll be getting a message from a bot telling you profit is a disambiguation page, Profit (economics) should be the piped link. Sorry about that. Neo Poz (talk) 00:58, 14 February 2013 (UTC)

Sue the Moral Philosophers for their Misuse and Abuse of the Economic Term "Self-Interest"/"Rational Self-Interest"
Self-interest should not be defined as egoism but as a term which could mean egoism, could mean altruism, could mean some admixture, could mean some strong ambivalence, and could mean all equally, or with one or more predominating, at the same time, or over time, or at different times, or with one or more of these different instants and durations predominating, in such way the the entire concept of the free market is not a lost concept on wikipedia. Or is wikipedia trying to hide from people the truth of what the laissez-faire free market is?

If we are not here to discuss what goes into Wikipedia, then there would be chaos with what goes into it. Now Milton Friedman and Gary S Becker consistently use the term in the manner I have here described, why are they not considered by Wikipedia to be part of the human race that uses the term self-interest? — Preceding unsigned comment added by 75.47.236.34 (talk) 14:33, 21 April 2013 (UTC)
 * WIkipedia is not a discussion forum. Rick Norwood (talk) 14:51, 21 April 2013 (UTC)

Edit Request #2
Would we be able to make a hypertext link to household at the end of the second sentence, opening paragraph, please?

"rules of the house(hold)."

It is a helpful definition to reference for a more precise clarity of the statement in which it is contained.

Thank you, most kindly.76.180.38.195 (talk) 12:55, 14 September 2013 (UTC)

Employment growth by top tax rate image
I've started a centralised discussion here regarding File:Employment growth by top tax rate.jpg, which is used in this article. Gabbe (talk) 09:59, 6 November 2012 (UTC)


 * While that discussion is underway, we can discuss the specific issue of using the image on this page. said  that this image shouldn't be on this page. His argument is that this article is a broad overview of a general topic, and the image illustrates something very specific, and is thus too detailed to be included in this article. I agree. Does anyone disagree? Gabbe (talk) 10:58, 7 November 2012 (UTC)


 * I agree this graph is too specific for this article. This article is on economics in general. Guest2625 (talk) 11:50, 7 November 2012 (UTC)

I think the graph belongs in this article. The question of whether or not lowering the top tax rate stimulates economic growth is, if not central to economics, certainly one of the most discussed questions about economic policy in the modern world. Rick Norwood (talk) 13:20, 7 November 2012 (UTC)
 * I looked again at the graph and its placement. It might be ok in the article I'm on the fence. It is in a section on unemployment. I forgot that I had broken down that previous 300px or more five image block that it was in which looked completely out of place. I think that this NYT article and the slides that it links to  could be useful at complementing the historical graph and addressing the concerns of skeptics. Guest2625 (talk) 01:39, 8 November 2012 (UTC)
 * I added an undue template to the discussion, and then I realized Cupco was banned. The chart is closely related to the text that Cupco added, and there are many problems with that text (which I explain above). Cupco's text is not supported by the references he provided. I didn't want to get into an edit war, so I posted my problems with the text above and hoped someone else would deal with it. Unfortunately, the text is still there. I'm going to remove the text now since it's the misleadingly referenced contribution of a banned editor. When it comes to the graph, the only source that supports this chart is an online article from the Center of American Progress. I don't have anything against CAP, but this is a high level article that shouldn't include content that's only available by dredging through a think tank's website. It's clearly undue weight to give a source like this this much attention.
 * ...PS, it looks like the only users backing this chart are suspected socks of Cupco. I'm removing the chart and text.--Bkwillwm (talk) 02:58, 10 November 2012 (UTC)

I supported the graph. Please explain the grounds on which you accuse me of being a "suspected" sock puppet of Cupco. Also, note that the source of the graph is the Center for American Progress ("for" not "of") which certainly seems to me to be a reliable source. Rick Norwood (talk) 13:17, 10 November 2012 (UTC)
 * Sorry, I was referring to others on [], so I forgot about your support. However, you stated "whether or not lowering the top tax rate stimulates economic growth..." This chart relates tax rates to unemployment, not growth. And while CAP is a RS, there is still the question of weight. If we start posting charts buried within CAP's website, we also open the door to people dredging through CATO and Heritage and posting charts based on those sources. We'd end up with a mess of charts from ideological, non-peer reviewed sources. Why should we favor this chart in particular? If the proposed tax/employment relationship were so central, there would be many peer reviewed economics articles, textbooks, etc. discussing it.--Bkwillwm (talk) 20:20, 10 November 2012 (UTC)

I accept your apology. I suspect that are peer reviewed articles on the relationship between the top tax rate, economic growth, and unemployment. I'll look and see what I find. Rick Norwood (talk) 21:44, 10 November 2012 (UTC)
 * Here are some from a class: and  (which is called peer reviewed at  in an earlier version). Are those good? Vilonermo (talk) 17:28, 12 November 2012 (UTC)

I support not including the graph, in this and other articles. It's too controversial and potentially misleading. Here, it is also too specific. There are much more appropriate graphs illustrating unemployment out there.  Volunteer Marek  17:47, 12 November 2012 (UTC)
 * I need some more of these, but if there is a reason I shouldn't use the ones above please tell me. Potentially misleading how, for instance? Vilonermo (talk) 18:00, 12 November 2012 (UTC)


 * I'm not sure I understand. What do these papers have to do with unemployment? The graph is potentially misleading because it suggests causation which might very well not exist. Also "employment growth" captures both changes in the unemployment rate as well as changes in the labor force participation.  Volunteer Marek   18:18, 12 November 2012 (UTC)

In the United States, we have recently had an election in which the most important question being debated was the assertion by one party that lowering the top tax rate was necessary to stimulate economic growth. That party lost the White House, but won the House of Representatives, which controls all spending bills. Many Republicans in the House are now asserting that lowering the top tax rate is necessary to stimulate economic growth. This is an economic question, and can only be answered by professional economists. If they have answered it, then the answer is important. If they have not answered it, then there should be papers in refereed journals that say so. I am well aware that correlation is not causation, but if water always runs downhill, there is probably a reason, and those who assert that water always runs uphill are wrong. Rick Norwood (talk) 18:43, 12 November 2012 (UTC)
 * Going back to the issue of weight, the topic level economics article should be changed based on the current talking point of one party in one country. This article should reflect the landscape of the economics field, not the current American political landscape. "Top marginal tax rate" is not found in any textbook treatment of unemployment or in traditional economic resources like New Palgrave's article on "Unemployment." This isn't just a question of reliable sources (CAP qualifies as a reliable source), but an issue of why we should put significant weight in a little researched correlation that's only relevant because of a GOP talking point du jour. Not long ago the GOP was pushing the fact that the US had one of the highest, nominal corporate tax rates (ignoring the fact that the actual, effective rate was relatively low). I'm sure they will push another talking point soon. This article would quickly become a mess if we started using it to respond to partisan talking points instead of making it an actual encyclopedia article.


 * When you state "...there should be papers in refereed journals that say so," you're making the assumption that economists instantly respond to politicians' talking points. This isn't the case. Economists generally start out trying to build comprehensive models of the economy instead of trying to provide ad hoc explanations for apparent correlations. Academic economists do their work based on what's going on in the economics field instead of responding to talking points.--Bkwillwm (talk) 19:46, 12 November 2012 (UTC)

But surely the question of unemployment is not something that has just come up for the first time in this election cycle. It has been a major question in economics for a long time, and there are, I am sure, major books and articles on the subject. I'll start with the one you mention, New Palgrave. Rick Norwood (talk) 21:26, 12 November 2012 (UTC)

There is an additional discussion of the deleted graph at and the subsequent section. EllenCT (talk) 01:27, 7 October 2013 (UTC)

Contradiction regarding the definition of Financial Economics
On Section 2.6. Paragraph 4, it says that Financial Economics can be also be referred to, simply as "Finance". This contradicts the article about, Financial Economics, Section 1, Paragraph 1, where it says: "Financial economics is the branch of economics studying the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. Financial economics concentrates on influences of real economic variables on financial ones, in contrast to pure finance. It is of my understanding that Economics is a science and Finance is also a science, both related by means of the field of Financial Economics. Editors of this article must be careful about that, since in the article for finance, such is being defined as a science on its own, not dependent on Economics. Therefore, some instances of the word finance, in this article, I think should be checked. More examples: Section 2.9 (Public Sector), Paragraph 1, "Public Finance" seems more like a sub-field of Finance. Section 4 (International Economics), Paragraph 1: If International Finance is indeed a sub-field of Macroeconomics, then it is a subfield of Economics, which again contradicts the assumption that Finance is NOT a sub-field of Economics, but a science on its own. On the other side, if experts agree on that it is a sub-field of economics, then the introduction for the article about finance should indeed be edited. Which in all fairness, lacks of a reference about this.

Ejspeiro (talk) 06:34, 29 August 2013 (UTC) - Thanks!

[anon]is Economics a science ? It seriously lacks any predictable power. — Preceding unsigned comment added by 94.227.130.49 (talk) 17:25, 14 October 2013 (UTC)

-

A Postscrip to Talk:Economics — Preceding unsigned comment added by 86.163.193.45 (talk) 14:12, 13 November 2013 (UTC)

Towards Super Economics?

Is there a more advanced form of economics which goes beyond Heterodox, and Neo-Classical Economics?

Transfinancial Economics — Preceding unsigned comment added by 86.163.193.45 (talk) 14:09, 13 November 2013 (UTC)

Synthesis?
why is synthesis? There have been a lot of edits with very poor edit summaries to this article over the past couple of months. I'm worried about at least a few more deletions and replacements since the beginning of the year. However, some of your edits are really good, so I'm hoping some more eyes can sort your wheat from your chaff, as it were. I hope that doesn't offend you. EllenCT (talk) 09:09, 3 March 2014 (UTC)

edit request: Criticisms of assumptions
I wold like to point out that any science, whether natural one like physics, biology, chemistry, etc. or social one like economics, psychology etc. relies at some point on unrealistic, unverifiable, or highly simplified assumptions.

For example physics use perfect objects such as the sphere, which is completely unrealistic in the real world, and also can be considered by some as "highly simplified assumption." You could in fact find unrealistic, untestable or oversimplified assumptions even in the widely accepted scientific theories like theory of evolution, but that of course does not mean that the theory of evolution is wrong, invalid or that evolution does not occur.

Scientists in any branch of science use an assumptions in order to make the observable phenomenon less complex, or to better understand only a part of some phenomenon, which of course has to go at the expense of exact description of reality. Thus in any science assumptions might seem as unrealistic or oversimplified to someone outside of the particular profession. Sometimes unrealistic assumptions such as in the case of the sphere are often in astrophysics used on planets, stars etc. in order to make possible to do calculations for area of such objects etc. Of course no astrophysicist believes that earth or any other planet is a perfect sphere. Therefore, the sphere assumption is unrealistic, unverifiable, and highly simplified assumptions, but without it no one could ever calculate the area of any celestial object. In real world there are no perfect spheres, cubes, triangles etc. but still physics assumes that, in order to make specific calculations or in order to formulate some specific theories. Similar cases could be made in any branch of science, and you could find similar assumptions in many widely accepted scientific theories.

Therefore, I do not understand why only article on economics include such critique and why such critiques of basic assumptions are not presented in articles dealing with other subjects like physics, biology, or psychology. This creates an image of economics as if it was some form of pseudo-science, when in fact all other sciences whether natural or social are using very similar approach. I am not saying that it is wrong to include such critique, but such critique exist for the whole body of empirical science, since any science is actually fundamentally based on metaphysics, and each science has its assumptions which might seem ludicrous to people outside of particular field.

Insofar, I believe that it would be fair to include at the end of the section which criticize basics assumptions in economics that:

However, all sciences, whether natural or social, are also sometimes relying on seemingly unrealistic, unverifiable, or simplified assumptions. The role of assumptions in scientific research is to make problem solving more efficient, since they help to reduce the complexity of observed phenomenon. Social sciences, like economics, are no exception. As in other sciences, research in economics is based on scientific method, and only those theories and underlying assumptions which have high explanatory value, or at least relatively high explanatory value compared to the other theories, are kept1. 2. 3..

References:

1. Mankiw N. G., (2011). Principles of Economics (6th ed.). ISBN: 978-0538453059

2. Krugman P. & Wells R., (2010). Economics (2nd ed.). ISBN-13: 978-0-7167-7158-6

3. Samuelson P. Nordhaus W: (2004). Economics (18th ed.). ISBN-13: 978-0072872057

Thank you for your time and consideration,

Sincerely,

1muflon1 (talk) 18:31, 3 January 2014 (UTC)


 * That's fine with me. EllenCT (talk) 09:10, 3 March 2014 (UTC)

There is an important difference between the social sciences and the physical sciences. The basic laws of physical science are generally accepted by essentially all scientists. The basic laws of the social sciences, if there are such, have yet to be discovered, so that we have in each social science several schools, each trying to establish superiority over rival schools. The physical sciences were able to land the Curiosity Rover on Mars. The social sciences were unable to prevent the Great Recession. Thus, the distinction between the hard sciences and the soft sciences.Rick Norwood (talk) 13:46, 3 March 2014 (UTC)
 * Physical scientists sometimes get confused with units of measurement just as social scientists sometimes get confused about which models most closely match historical data by predicting subsequent outcomes from prior observations. There are competing schools of physical sciences pertaining to a variety of chemical, biological, astrophysical, particle, and string theories. EllenCT (talk) 01:18, 4 March 2014 (UTC)

There is a difference between mistakes -- everybody makes mistakes -- and disagreement about what the basic laws are. There is also a difference between the basic laws, and ideas on the cutting edge, such as string theory. There are no "competing schools" of chemistry, biology, or astrophysics. The basic laws of all three are well understood. There is nothing in the social sciences, especially in economics, that compares with, for example, Newton's law of gravity. Also, engineering based on the physical sciences has been hugely successful, social engineering less so. Rick Norwood (talk) 19:53, 4 March 2014 (UTC)
 * What is the essential difference between competing theories explaining phenomena on e.g. the list of unsolved problems in chemistry and competing theories of corporate income tax incidence? The four laws of supply and demand are generally considered as fundamental by economists as physicists consider Newton's law of gravity -- and both are known to be merely approximations of the underlying effects. EllenCT (talk) 09:16, 5 March 2014 (UTC)

The difference is this. Unsolved problems are on the cutting edge of research in chemistry. Whether corporations should or should not pay income tax is pretty basic. It would like chemists being unable to agree whether atoms exist. As for the so called law of supply and demand, there are many counterexamples. One easy counterexample: Rolex watches: a higher price results in a higher demand. Stamp collections are another counterexample: a lower price results in a lower demand. Note that the article supply and demand has a "Criticism" section. The article chemistry does not. Rick Norwood (talk) 13:34, 5 March 2014 (UTC)
 * There are no competing theories of whether corporations should pay income tax. There are competing theories as to how much the different income levels of the population end up paying for it when they do. That is in fact on the cutting edge of economics, because it depends on circumstances and variables which are not yet concisely and parsimoniously described, just as the near-complete theory of atoms and molecules still has unanswered questions at high complexities. I apologize for the typo on "the four laws of supply and demand." Those who do not choose to educate themselves on the predictive confidence intervals of the best economic models are no different than those who choose to remain willfully innumerate. I think it is completely reasonable to balance the criticism section in this article with the differing point of view provided. EllenCT (talk) 23:55, 5 March 2014 (UTC)


 * Your suggestion that I don't understand confidence intervals is unwarranted. I teach confidence intervals.  "There are no competing theories of whether corporations should pay income tax."  Milton Friedman believed corporations should not pay any income tax.  Of course, any criticism section of any article should be balanced. Rick Norwood (talk) 13:14, 6 March 2014 (UTC)
 * How would you rate your understanding of the confidence intervals of predictions observed for the top two New Keynesian DSGE models? What is your source for the Friedman assertion, and does it refer to corporations as they are commonly understood, or some formulation which prohibits tax avoidance with trusts or S-corporation pass-through? EllenCT (talk) 02:07, 7 March 2014 (UTC)


 * Why economics is not a hard science, one example: http://www.npr.org/blogs/money/2014/03/06/286861541/does-raising-the-minimum-wage-kill-jobs Rick Norwood (talk) 23:25, 6 March 2014 (UTC)
 * Anecdotes are not data. Do you think it is difficult to find counter-examples to general laws or similar anecdotes of absurdity in the "hard" sciences? The Schrodinger equation's solutions for molecular orbitals are no less complex and exception-prone than modern predictive economic models. The peer reviewed literature reviews have not been discordant on minimum wage issues for years to decades now. EllenCT (talk) 02:07, 7 March 2014 (UTC)


 * Guys, the talk page of this article is not the place to have this debate. Take it to a personal talk page, please. WeakTrain (talk) 02:11, 7 March 2014 (UTC)
 * We are discussing the edit request. Do you have an opinion on it? EllenCT (talk) 06:24, 7 March 2014 (UTC)

Essentially, the edit request above wants this article to say that the natural sciences are no better than the social sciences. Quoted from above: "all sciences, whether natural or social, are also sometimes relying on seemingly unrealistic, unverifiable, or simplified assumptions". This has no place in an article on economics. If it has a reputable source, it belongs in Philosophy of Science, not here. Very briefly: Friedman on taxing corporations: Capitalism and Freedom, page 132, "The corporate tax should be abolished." Rick Norwood (talk) 13:20, 7 March 2014 (UTC)


 * The essence of that statement isn't that one kind of science is not better than any other, it's that all sciences are not perfect. The idea that corporate taxes should be abolished has been entirely absent from peer reviewed literature reviews in economics since the 1930s. EllenCT (talk) 03:40, 8 March 2014 (UTC)

Your first statement, even if true, has no place in this article. A quick counterexample to your second statement: "Can Capital Income Taxes Survive? And Should They?" http://cesifo.oxfordjournals.org/content/53/2/172.short Rick Norwood (talk) 14:19, 8 March 2014 (UTC)
 * It is completely appropriate to present both points of view in a critique, instead of just pro or con. Your source is not a counterexample, because all of the proposals in Table 4 on page 218 are for reform instead of abolition. EllenCT (talk) 02:46, 9 March 2014 (UTC)

I'm sorry I let myself be drawn off topic; it seemed unlikely to me that not one published paper in the past eighty years expressed the opinion of a Nobel Prize Winning economist, but that is neither here nor there. The only topic is: is criticism of the physical sciences an appropriate topic to discuss in this article. It is not. Rick Norwood (talk) 12:56, 9 March 2014 (UTC)
 * I agree that criticism of the physical sciences can be easily avoided in a balanced critique. Peer reviewed literature reviews are not the same as just any published paper. You have been editing in good faith, but there is more to reason than faith. EllenCT (talk) 22:21, 9 March 2014 (UTC)

Semi-protected edit request on 9 May 2014
189.10.128.192 (talk) 00:44, 9 May 2014 (UTC)
 * Red question icon with gradient background.svg Not done: it's not clear what changes you want made. Please mention the specific changes in a "change X to Y" format. Please resumbit your request with any necessary reliable sources. Thanks, Nici  Vampire  Heart  01:05, 9 May 2014 (UTC)

Sentence that needs to be sourced.
Added in a recent edit: "We cannot define economics as the science that study wealth, war, crime, education, and any other field economic analysis can be applied to." According to whom? Also note: "study" should be "studies". Rick Norwood (talk) 22:49, 9 March 2014 (UTC)

unemployment
in recent times in Ghana, unemployment have been a major macro economic issue. as a student of economics, write an article to be presented on a seminar stating the causes, effects of unemployment as well as how to control unemployment problems in your country?

41.218.226.137 (talk) 19:40, 16 March 2014 (UTC)


 * This is not the place for that. I suggest you read "Global Economic History" by Robert C. Allen. Rick Norwood (talk) 12:37, 17 March 2014 (UTC)


 * It is reasonable to expect that the Unemployment article should have a more thorough exposition on monetary, fiscal, resource, and environmental factors shown to cause employment in the most reliable sources and the most popular sources which defer from them. That is what Unemployment would probably look like if it was not US-centric. Developing versus developing countries' perspectives should both be included. The evidence strongly points to the extent of tax progressiveness as being the principal determinant component. EllenCT (talk) 01:51, 18 March 2014 (UTC)

I agree that these sources are plausible, but both are original research. Before we can use them in Wikipedia they need to be published in a refereed journal. Rick Norwood (talk) 12:06, 18 March 2014 (UTC)
 * and are consistent refereed papers, the first being a literature review, and the book reviewed at  is based on refereed work in epidemiology journals, which is perhaps a harder science than economics. EllenCT (talk) 10:35, 22 March 2014 (UTC)
 * Do these two studies actually say anything about unemployment? Regards, Iselilja (talk) 12:34, 25 March 2014 (UTC)
 * They all do. And there are three, not two. How would you use their conclusions to improve the article? EllenCT (talk) 02:51, 28 March 2014 (UTC) why are you arguing so hard for the inaccurate side at arbitration but not helping out here? EllenCT (talk) 22:53, 14 April 2014 (UTC)

Classical models
"Classical models of unemployment occurs when wages are too high for employers to be willing to hire more workers. Wages may be too high because of minimum wage laws or union activity."

That classical model is missing the law of supply and demand. This article is biased towards the rich and against the greater agregate demand that comes with an expanding middle class because of the positional effects described in. Much of this has happened recently. EllenCT (talk) 22:53, 14 April 2014 (UTC)

Intro is an article.
The introducion is not an introduction in the usual sense. It is an article unto itself and conatains information that should appear in the TOC I suggest abstracting a much shorter introduction and integrating the rest into the body of the article. — Preceding unsigned comment added by 69.116.92.84 (talk) 13:20, 22 April 2014 (UTC)

Business cycle
The business cycle assumes that increases in productivity will remain decoupled from increases in wages, which is the same as saying taxes will remain regressive, because of the aggregate demand inherent in a growing middle class. EllenCT (talk) 22:53, 14 April 2014 (UTC)


 * There is a business cycle article. Is there something in that article that needs improvement? If so, that is the place to contribute or discuss. – S. Rich (talk) 00:01, 15 April 2014 (UTC)
 * Yes but I don't know what it is yet. EllenCT (talk) 05:41, 7 May 2014 (UTC)
 * It's just as likely that the improvement should be made to whatever article discusses how changes to the statistics cited at are derived. It is probably best to ask about that at WT:ECON. EllenCT (talk) 01:33, 20 May 2014 (UTC)

Opening
This article is about the broad topic of economics, it is not about the neoclassical school of economics. The neoclassical school of economics has its own section, and it has its own article(s) as well. The definition of economics in Merriam Webster's is "a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services".

The 1911 Encyclopedia Britannica starts:

ECONOMICS (from the Gr. οἰκονομική, sc. τέχνη, from οἶκος, a house, and νόμος, rule,—the “art of household management”), the general term, with its synonym “political economy,” for the science or study of wealth (welfare) and its production, applicable either to the individual, the family, the State, or in the widest sense, the world.

People from the neoclassical school keep trying to make the opening say all of economics is tailored to just how they see things. Wikipedia should stick to NPOV like Merriam-Webster and the Encyclopedia Britannica do, and not have the whole opening written from a neoclassical slant.

The opening which has been there for years, and which was there at the beginning of this year, is similar to the old Encyclopedia Britannica, or modern Merriam-Webster definition. We should have a NPOV opening which does not just give the ideas of one economic school. Minimax Regret (talk) 04:55, 23 June 2014 (UTC)


 * Good call. The idea that economic actors behave rationally has been so thoroughly debunked that it certainly does not belong in the lead.  Rick Norwood (talk) 12:33, 23 June 2014 (UTC)

Copyright problem removed
Prior content in this article duplicated one or more previously published sources. The material was copied from: The History of Economic Thought: A Reader, page 4 and History of Economic Thought: A Critical Perspective, page 3. Copied or closely paraphrased material has been rewritten or removed and must not be restored, unless it is duly released under a compatible license. (For more information, please see "using copyrighted works from others" if you are not the copyright holder of this material, or "donating copyrighted materials" if you are.) For legal reasons, we cannot accept copyrighted text or images borrowed from other web sites or published material; such additions will be deleted. Contributors may use copyrighted publications as a source of information, and according to fair use may copy sentences and phrases, provided they are included in quotation marks and referenced properly. The material may also be rewritten, but only if it does not infringe on the copyright of the original or plagiarize from that source. Therefore such paraphrased portions must provide their source. Please see our guideline on non-free text for how to properly implement limited quotations of copyrighted text. Wikipedia takes copyright violations very seriously, and persistent violators will be blocked from editing. While we appreciate contributions, we must require all contributors to understand and comply with these policies. Thank you. Diannaa (talk) 00:12, 25 July 2014 (UTC)

Updating definition of Economics
Below is a proposal to update the definition of economics. If economics is a social science it must study some aspect of human behavior. The proposed definition does not make any assumption of human behavior such as self interest, rationality or estable preferences. It only says it studies human behavior as a relationship between ends and scarce means, and that when the ends are value, behavior adopts the form of choice.

The definition in the article on economics is based on the one giving by Jean-Baptiste Say in his "Treatise on Political Economy or, The Production, Distribution, and Consumption of Wealth", published in 1803. But, as Lionel Robbings pointed out one hundred and thirty years later: "it follows from the very nature of a science that until it has reached a certain stage of development, [the right] definition of its scope is necessarily impossible." Robbins thought that, by his time, the economic science "had become sufficiently unified for the identity of the problems underlying it various separate spheres of practical and philosophical enquiry to be detected" ; consequently, he wrote a hundred and sixty pages essay on "The Nature and Significance of Economic Science". After forty years of angry criticism and spirited discussions by his peers, his views became widely accepted by main stream economists.

Say's approach was to define economics specifying certain areas of human activity. By implication, economics analyzes everything that goes on in those spheres. Nothing farther from the truth. Acconding to Robbings economics only analyzes certain aspects of production, distribution and consumption of wealth, "the form imposed by the influence of scarcity". It does not study production as a process or the different techniques to produce a thing; neither study management nor production problems.

Here is a simple example of an economic analysis applied to the airline industry as an illustration of a topic different than wealth. Safety is a big concern of everyone who flies or contemplates it. We are nineteen times safer in a plane than in a car, according to Arnold Barnett, MIT professor of statistics and an authority in the subject. In order to save lives, a safety proposal for airline carriers may be under consideration; but if the proposal increases airline ticket prices or multiplies air travel inconveniences, it may end costing more lives than it saves, if it pushes enough people onto the road. Therefore, the way people make choices on their travel options (economics) must be considered in any airline security proposal.

I present below the proposed definition based entirely on Robbins' for consideration and review of the Wikipedia public.

'''"Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses". First, economics studies public and private choices concerning the allocation of scarce resources to competing ends, because when ends are value, "behaviour necessarily assumes the form of choice". . People and society busy themselves in solving the ever present problem or dilemma of choosing among alternate courses of actions and uses of their scarce resources, as choosing one alternative means foregoing another, what economist call opportunity cost. When people and society try to solve this problem they are economizing -going through a logical process of choosing among alternatives. This is the central issue in economics. And second, the allocation activity is a dynamic process changing and adjusting for every period according to the technical and social environment and the scarcity conditions of resources. Economics studies the successive series of allocation events as they move toward a steady state, what economists call equilibrium. Then, economics tries to discover the equilibrium conditions and evaluates the consequences and implications equilibrium has for the individual, for a segment of society and, in the aggregate, for society at large.'''


 * References supplied by Firulaith

Wikipedia articles do not represent our personal opinions, they are our best attempts to represent what the mainstream academics in the subject have published about the topic. -- TRPoD aka The Red Pen of Doom  03:28, 18 July 2014 (UTC)

What I am proposing is to use Lionel Robbins' definition instead of Jean-Baptiste Say's definition which has become obsolete. It has been long struggle, but Robbins's definition is now the most widely acepted by today mainstream economists (see Reference [1]). What I doing in this talk page is to persuade you and other wikipediam to accept it. Firulaith (talk) 00:14, 19 July 2014 (UTC)

Scarcity, value, choice, economizing, opportunity cost, and equilibrium are basic concepts of pure economic science. They are applied from an isolated man in a forgotten island, to the global economy with its intricate web of social, political, economic relationships. Pure economic science does not presuppose the existence of exchange, distribution, institutions, social relationships, or mode of production. A single isolated man in a forgotten island, as well as a patriarchal, medieval, capitalistic, or socialistic societies deal with those concepts on a daily basic. Firulaith (talk) 19:02, 18 July 2014 (UTC)


 * I'm following this discussion with interest. It reminds me of the last major rewrite of the article mathematics.  There the mathematician's definition: mathematics is the method of deduction applied to precise definitions and axioms, lost out to the lay definition: the study of numbers and shapes.  The definition of economics in this article is currently the lay definition.  Will you succeed in replacing it with the economist's definition?  If so, you need to render the economist's definition briefly and clearly, avoiding words such as "versatile", which I assume means that "your money or your life" is not an economic transaction. Rick Norwood (talk) 23:36, 18 July 2014 (UTC)

I have rewriten this proposal acconding to S. Rich (talk) and Rick Norwood|talk, advise. I made it shorter, with more references, and excluded what may be construe as "original work". — Preceding unsigned comment added by Firulaith (talk • contribs) 00:30, 19 July 2014 (UTC)


 * For Robbins's definition to be useful here, it needs to make sense to the lay person, and coincide with the way the word is commonly used. "Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses," raises several questions.  1) Is there any advantage to the word "human".  Are humans the only animals to which economics can be applied?  2) Why must the means be scarce?  Food is no longer scarce.  America throws away enough food to feed all the hungry people in the world.  Is understanding the waste of abundant resources not an economic question?  3) Must the means have alternative uses?  If you (and only you) are drowning and I offer to sell you the only life jacket for $1000, is that not an economic transaction?  But if we take out those three words, then all of sociology, psychology, and philosophy becomes economics.  What I am asking is, why do those three restrictions, and not others, make behavior economic? Rick Norwood (talk) 11:30, 19 July 2014 (UTC)

You have raised excellent questions Rick. Economics is a social science, as such, it about human behavior not animal behavior for which, the logical process for choosing among alternatives is incipient or entirely guided on instincts and trial and error. Although humans have instincts and use the trial and error procedure extensible, they also value their options with personal and social considerations and choose, accordingly, with difficulty and uncertainly. If food is wasted in large quantities, the economic and political system is not doing a good job in allocating scarce resources. Scarcity means, that although we may have many things, we are not yet satisfied, we want more; even the richiest people want more. Scarcity would end when we can have all what we want of everything without sacrificing anything, or when we are totally content with what we have. Until that happens, scarcity reigns sovereign. An finally, means must have alternative uses, besides being accessible, otherwise there is no need to choose, and economic analysis is superfluous. Firulaith (talk) 16:52, 19 July 2014 (UTC)


 * Thank you for your reply. 1) Psychology is a social science, but we have the field of animal psychology.  I'm not really raising an objection, just wondering if the word "human" adds anything to the sentence.  2) I see your point.  3) This is less clear to me.  Even if the means, like the life jacket, have no alternative use, a person can still refuse to buy at a certain price, or refuse to sell at a certain price.  I'm reminded of a friend of mine who collects old time radio.  He met a US Army Sargent in Europe who had phonograph records of old time radio programs that were distributed to the troops during World War II.  My friend offered the Sargent all the money he could afford for the records.  The Sargent chose to break the records instead of selling them, though he would have sold them if my friend could have raised more money.  Even when something has no alternative use, people sometimes refuse to sell.  Is that not an economic decision? Rick Norwood (talk) 22:04, 19 July 2014 (UTC)

I had to think this for a while, Rick. If you are suggesting that the word “human” is understood, then it is fine to remove it. But if what you are implying is that economics may study human and non human behavior as well, we could be accused of “original work” by other wikipedians. The word history, for example, can ambiguously mean the geological history of the earth, a wikipidia article history, or the social science that study past “human” events. I would say that the word “human” clarify the sense the word “behavior” is used in the sentence.

As for your third point, you are talking about exchange. We all own property that can be exchanged in a market at a price. We are not seeking to sell most of them. For the ones we would sell, we have a reservation price, meaning the minimum price at which we would let them go. If nobody offers us at least our reservation price we won’t sell. The modern means to acquire property by exchange is money, which is both scarce and has alternative uses. As you say, the decision to sell or to buy is an economic one. We should consider those decisions as human economic behavior, which involves desired ends and limited resources capable of alternative application to obtain them. Firulaith (talk) 01:58, 21 July 2014 (UTC)

I think it is a bad idea to start wandering from the sources. we should hew close to what WP:UNDUE the general usages/definitions are.
 * "the science that deals with the production, distribution, and consumption of goods and services"
 * "the social science concerned with the production and consumption of goods and services and the analysis of the commercial activities of a society"
 * "The science that deals with the production, distribution, and consumption of commodities."
 * "economics examines how people use their scarce resources to satisfy their unlimited wants"
 * "the science that studies how people choose"
 * "the study of a society's commercial activities in terms of the production, distribution and consumption of goods and services and how resources should be allocated."


 * "economics is the study of scarce resources which have alternative uses"

Good references. Too bad you forgot to sing your contribution. References 9, 10, and 11 are based on Say's definition whereas 12 (2014), 13 (2011), and 15 (2011) on Robbings'. Reference 14 (2006) are based on both. Say’s definition was fine, at his time, because, all classical economists, and Marx and Engels focused their attention on production, distribution, and consumption of wealth. When other economists made theoretical inroads in other areas of human knowledge, and their work was accepted as mainstream, then the Say’s definition became obsolete because, it left out main areas of economic theoretical inquires. Moreover, economics only analyzes certain aspects of production, distribution and consumption of wealth those falling under the influence of scarcity, which force people to choose and economize. Robbings' definition covers Say´s plus the left out areas.

I invite wikipidians to edit my proposed opening for the economic article or to say they are fine with the way the opening is. Firulaith (talk) 21:45, 21 July 2014 (UTC)

I have decided to rewrite the opening of the economics article as shown below. I leave it here for seven days, waiting for comments.

At the dawn as a social science, economics was defined and discussed at length as the study of production, distribution, and consumption of wealth by Jean-Baptiste Say in his "Treatise on Political Economy or, The Production, Distribution, and Consumption of Wealth" (1803). This definition has prevailed up to our time, save by substituting the word "wealth" for "goods and services" meaning that wealth may include non physical objects as well. One hundred and thirty years later, Lionel Robbings noticed that definition no longer sufficed, because many economists were making theoretical and philosophical inroads in other areas of human activity. Then, he proposed a definition of economics as a study of a particular aspect of human activity, the one falling under the influence of scarcity, which forces people to choose, allocate scarce resources to competing ends, and economize (seeking the welfare while avoiding the waste of scarce resources). For Robbings, the insufficiency was solved, and his definition allows us to proclaim, with an easy conscience, education economics, safety and security economics, health economics, war economics, and of course, production, distribution and consumption economics as valid subjects of the economic science.

Citing Robbings: "Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses". After discussing it for decades, Robbings's definition became widely accepted by mainstream economists, and it has made its way into current textbooks. Although far from unanimous, most mainstream economists would accept some version of Robbings' definition; even though, many have raised serious objections to the scope and method of economics, emanating from that definition. Due to the lack of strong consensus, the old definition is still used by many quarters. Firulaith (talk) 06:00, 26 July 2014 (UTC)

Firulaith (talk) 02:06, 25 July 2014 (UTC)Firulaith (talk) 15:35, 25 July 2014 (UTC)

M&Ms says: Bravo! The opening is far superior to the previous version. Bravo, again! — Preceding unsigned comment added by 211.228.241.94 (talk) 03:57, 6 August 2014 (UTC)

The new opening is fine for the neoclassical economics article, or the neoclassical economics section of this article. It is not fine for the opening. This is an article about economics, meaning *all* of economics, not just neoclassical economics. It is a broad article, not a narrow article for just this one school of thought. The opening which sufficed for years is the better one. It would be like changing the opening of the religion article to talk about how religion is actually Christianity, because there are a lot of Christians in the world, and worshipping gods like Thor and Baal is a little out of date. I don't see anything wrong with what is written in the opening, the problem is it all belongs in section 8 under neoclassicism, which is where I am moving it.

Also, this is a tangential note, and not all that important for the matter at hand, but I have to laugh at ''One hundred and thirty years later, Lionel Robbings noticed that this definition no longer sufficed, because many economists were making theoretical and philosophical inroads in other areas of human activity. Then, he proposed a definition of economics as a study of a particular aspect of human behavior, the one that falls under the influence of scarcity, which forces people to choose, allocate scarce resources to competing ends, and economize (seeking the greatest welfare while avoiding the wasting of scarce resources).'' We're now living in an age where record companies, movie companies, book companies, software companies and a variety of other firms are pushing laws and lawsuits precisely because there is a lack of scarcity for a piece of intellectual property which can be duplicated millions of times and be distributed worldwide at the push of a button for next to no cost. The modern economy, and certainly the way it is headed in terms of capital investment, is one in which there is no elements of scarcity in the commodities produced, so perhaps times have changed so that the definition of "Lionel Robbings" (sic) also "no longer sufficed". Minimax Regret (talk) 03:12, 17 August 2014 (UTC)


 * You are right Minimax, Robbings's definition probably needs to be updated. It was written 82 years ago when there was no internet nor current advances of information technology. I only have exposed the Say's definition (the classical one) and the Robbings's definition, which I am not sure that it could be considered neoclassical . The merit of Robbings's definition is to put scarcity as the central problem of economics. Without scarcity there is no need of the study of economics because there would be nothing to economize. We would be back to the garden of eden where we would be immortals and every thing we need and want we can get without any effort. Moreover, the absent of scarcity only means that there is not economic problem to solve, saved the legal ones concerning property rights. There have always been non-scarce free goods of nature, like the air we breathe, because, so little effort is needed to breathe that we do not even notice it. In the case of air, there are no legal problems because no one has appropriated the air yet. Surely, it would be wonderful if we could eliminate the scarcity of all goods and services and return to paradise by ourselves.


 * The classical definition points to a general area of ​​study while the Robbings's definition points to the central problem of economics without naming an area of ​​study, leaving it open. We should leave them both, because they complement each other.

Firulaith (talk) 20:39, 17 August 2014 (UTC)

A quick fix
Someone needs to change social science in the first few words to social science. Thanks. 67.252.103.23 (talk) 22:57, 29 August 2014 (UTC)

Tiny out-of-place section needs to be deleted
Currently there is a highest-level section which in its entirety reads


 * Gross Domestic Product (GDP) or Economic Growth
 * Main article: Gross domestic product
 * Gross Domestic product means the total value of goods produced and services provided in a country in a year. GDP is customarily reported on annual basis.


 * GDP = C + I + G + (X - M)

This needs to be deleted.
 * The section title makes it sound like two non-synonyms are synonyms. And growth, which appears in the title, doesn't even appear in the section.
 * The title doesn't follow WP capitalization rules.
 * It's not relevant in an article about the discipline, as opposed to an article about the content of the discipline.
 * Even if relevant to this article, it would belong as a sub-section of the main section Macroeconomics rather than as a main section itself.

208.50.124.65 (talk) 18:01, 1 September 2014 (UTC)


 * ✅ (by someone other than me.) EllenCT (talk) 04:00, 13 September 2014 (UTC)

Inequality
The most important problem that we are facing now today, I think, is rising inequality in the United States and elsewhere in the world.
 * &mdash;2013 Economics Nobel prize winner Robert J. Shiller

I am going to add a section on inequality to this article. I don't know exactly what details yet, but it will summarize the material which is already in Economic inequality. I do not intend to add anything that isn't already in that article, and I will endeavor to add both sides of opposing arguments. I am posting here first to get people's suggestions and opinions if they wish to offer any beforehand. EllenCT (talk) 06:31, 15 September 2014 (UTC)

dlb
1. Full Employment 2. Stable Prices 3. Economic Growth 4. Balanced Budget 5. Balance-to-Payment Equilibrium — Preceding unsigned comment added by 150.216.63.185 (talk) 17:01, 18 September 2014 (UTC)

Semi-protected edit request on 17 December 2014
In the third paragraph under the Supply and Demand heading the sentence "That is, the higher the price of a product, the less of it people would be prepared to buy of it (other things unchanged)." should say "That is, the higher the price of a product, the less of it people would be prepared to buy (other things unchanged)."

Jbuttenshaw (talk) 23:05, 17 December 2014 (UTC)

✅ Thanks for pointing that out - Arjayay (talk) 08:58, 18 December 2014 (UTC)

Current state of the field & consensus
Five fairly large holes on this page that I think would be worthwhile to address;


 * Agreement should be renamed to Consensus
 * Using Greg M's post on what consensus exists is unnecessary as empirical work has been undertaken to understand consensus in the field. Two papers that immediately come to mind that would be useful on this subject would be or.
 * Since the neoclassical synthesis economics has largely been dominated by New-Keynesian thought, while the discussion of the history of economic schools is of importance there is no discussion of absence of a significant school bias in modern economics. There is no Keynesian school or Chicago school today, merely New-Keynesian alone.
 * While Marx is hugely important as a historical figure and in other social sciences he is a minor post-Ricardian economist in economic history and Marxian economics is no more notable then Austrian economics. Marxian should be included with the other heterodox schools in "Other schools and approaches".
 * "Within macroeconomics there is, in general order of their appearance in the literature; classical economics, Keynesian economics, the neoclassical synthesis, post-Keynesian economics, monetarism, new classical economics, and supply-side economics. Alternative developments include ecological economics, constitutional economics, institutional economics, evolutionary economics, dependency theory, structuralist economics, world systems theory, econophysics, feminist economics and biophysical economics." is unsupported by its cite, there hasn't been work done to explore how common the various schools are as most authors don't specify what (if any) school they align with.

Greapy (talk) 02:27, 3 January 2015 (UTC)

A matter of definitions
How a subject is defined colours the discussion of that subject. There are many definitions of economics. This is the one at the head of the article:

Economics is the social science that studies economic activity to gain an understanding of the processes that govern the production, distribution and consumption of goods and services in an economy.

However, prouction itself needs to be defined as transformation of nature-given materials into a form useful in satisfying human needs.

This definition promotes the awareness that economic activity is dependent on the natural environment and would prompt references to issues relevant to enwironmental concerns. Janosabel (talk) 13:07, 26 January 2015 (UTC)

Orphaned references in Economics
I check pages listed in Category:Pages with incorrect ref formatting to try to fix reference errors. One of the things I do is look for content for orphaned references in wikilinked articles. I have found content for some of Economics's orphans, the problem is that I found more than one version. I can't determine which (if any) is correct for this article, so I am asking for a sentient editor to look it over and copy the correct ref content into this article.

Reference named "Samuelson": From Normative economics: Paul A. Samuelson and William D. Nordhaus (2004). Economics, 18th ed., pp. 5-6 & [end] Glossary of Terms, "Normative vs. positive economics." From Austrian School:  From Mathematical economics:  From Binary economics: D'Art, Darryl (1992) Economic democracy and financial participation: a comparative study, Routledge p.96 

I apologize if any of the above are effectively identical; I am just a simple computer program, so I can't determine whether minor differences are significant or not. AnomieBOT ⚡ 06:54, 25 March 2015 (UTC)

Definition of Economics (again)
The current Wikipedia definition of economics as "the social science that studied economic activity" do not say much. It is like saying that philosophy study philosophical thinking, and physics study physical phenomena, and history study historical developments. And, as Janosabel says in Talk:Economics, production itself needs to be further explained as the transformation of nature-given materials into a form useful in satisfying human needs, to clarify the definition. Also, since we are taking about distribution, we are presupposing that the "economic activity" takes place in a social setting where distribution is a must, not in a situation in which there is only one individual doing the "economic activity".

Of course, economics only analyzes certain aspects of production, distribution, and consumption. It doesn't deal of production from the administrative perspective (management or production problems); neither refers to the step by step process which ends in a final product; nor studies the transformation technologies. For some it studies the social relations which give rise to the exploitation of a social class by another; for others it studies the public and private choices concerning the use of scarce resources. Still, there are a myriad of micro-issues that are part of economics but they don't remotely have anything  to do with production, distribution, or consumption: issues in education, law enforcement, and airline safety among many others.

Here is an example for the airline industry. Safety is a big concern of everyone who flies or contemplates it. We are nineteen times safer in a plane than in a car, according to Arnold Barnett, MIT professor of statistics and an authority in the subject. In order to save lives, a safety proposal for the airline carriers may be under consideration; but if the proposal increases airline ticket prices or multiplies air travel inconveniences, it may end costing more lives than it saves, if it pushes enough people onto the road. Therefore, economics must be considered for any airline security proposal.

Borrowing from Princeton professor of economics Elizabeth C. Bogan, "economics is the study of how people and societies deal with scarcity." If there were such an abundance of goods and services that everybody is able to consume anything he/she wishes to the point of satiation, then there is no scarcity and the study of economics has not point. Everybody would be extremely wealthy and can waste resources at will. In the case of safety for the airline industry, everybody would pay for the increase of the airline tickets i regarding of it cost, if it saves lives. No social issues would arise and no painful choices has to be made. But scarcity is a fact of life. As Lionel Robbins stated: time is limited, life is short, and nature is niggardly. Production is only a way people and societies deal with scarcity. Firulaith (talk) 14:03, 27 March 2015 (UTC) Firulaith (talk) 14:04, 27 March 2015 (UTC) Firulaith (talk) 14:13, 27 March 2015 (UTC)


 * It's a nice definition, but in an age of plenty, when many economic decisions are made not to deal with distribution of scarce resources but to create a demand for abundant resources it no long applies. Rick Norwood (talk) 11:57, 27 March 2015 (UTC)

Hi! Norwood, nice hearing from you again. To have food on our table, a roof over our heads, some clothes to put on, and some transportation facilities do not mean we are in the age of plenty because we are far from satiation. As Keynes magisterially explained, the appearance of abundant resources is only a dismal failure of the economic system which can persistently lay down large quantities of scarce resources such as f labor, capital and land while people increasingly suffers all kinds of scarcities and miseries. Keynes cleaver solution indeed was to increase aggregate demand for goods and services by given away large quantities of money to everybody. Firulaith (talk) 14:46, 27 March 2015 (UTC)

Keynes's solution has been tried, and does not always create a demand. There seems to be an unlimited demand for gambling, drugs, and a few other commodities, but in other areas of the economy supply does not always create demand. Once you have one big screen tv, you don't want another one. In the fifties, Madison Avenue claimed that it could create a demand for any product, and we got the age of conspicuous consumption. Today, the problem is too much stuff, not too little, for many but not all consumer goods and services. It seems clear to me that this is still an economic problem. Rick Norwood (talk) 15:28, 27 March 2015 (UTC)

This is getting into the realm of (shaky) OR and not sourced text for article improvement. SPECIFICO talk  16:19, 27 March 2015 (UTC)


 * If I wanted this in the article, I would do a lot of background research first. I'm just bringing up what seems to me the most important economic question for the twenty-first century.  If machines can provide all the goods and services people desire, and the corporations that own the machines offer the computer generated goods and services at a price set to maximize profit, what happens next?  Since there are no jobs (the machines do everything) everyone without money starves.  Then even the people with money begin to starve unless they work for one of the corporations that owns the machines.  Admittedly this is an extreme case, which we will only approach as a limit, but already more and more goods and services are being produced with fewer and fewer hours of work.  This is, I submit, an economic problem. Rick Norwood (talk) 16:42, 27 March 2015 (UTC)


 * Thinking over the proposed definition, it may be that the area called economics is only focused on questions of scarcity, in which case problems of distributing abundant resources without waste, and of controlling anti-social behavior without the goad of withholding material goods, are problems best addressed by sociologists and political scientists rather than economists. In short, I'm talking myself around to liking the definition of economics as the study of scarcity. Rick Norwood (talk) 23:19, 28 March 2015 (UTC)


 * If you're interested in this, I suggest you search the recent literature on the subject. I don't think you'll find that your views are shared by the mainstream.  SPECIFICO  talk  23:58, 28 March 2015 (UTC)


 * I've been reading quite a lot of the recent literature, though of course it isn't my area of expertise. I'm particularly interested in mathematical economics, and mathematics is my area.  Since I've expressed several different views I'm not sure which ones are not shared by the mainstream.  The question here is the proposed definition: "economics is the study of how people and societies deal with scarcity."  If this were a universal definition I would simply accept it.  Since there are other definitions in the literature, I'm testing it the way I test a definition in mathematics, asking: If we take this as the definition, then what areas fall under that definition and what areas do not?  We already have, to take just one example, enough food to feed all of the hungry in the world, so food is not scarce.  Does this mean that the question of the distribution of food, even though it involves money at almost every stage, is not an economic question?  Or do the political and military actions that withhold food from certain areas, and thus render it scarce locally even though plentiful globally, create an artificial scarcity that brings this question back into the area of economics?  Would the distribution of food be an economic question if it was universally plentiful, but if money were used as a tool to prevent waste and to control behavior?  In short, if economics is not what my dictionary says it is, "the science concerned with the production and consumption or use of goods and services," then is the alternative to the dictionary definition a useful one. Rick Norwood (talk) 12:30, 29 March 2015 (UTC)

Firulaith (talk) 04:05, 2 April 2015 (UTC)

The Meaning of Scarcity
This section is being writing for the benefit of Norwood who I believe is a swell guy. Norwood hit hard on several issues; but I am going to start with scarcity, since we cannot go further in discussing how to improve the Wikipedia article head portion of economics without having some common ground concept of scarcity.

In a modern market economy scarcity is represented by the budget restrains of all participants. Almost everybody feels that they don't have enough income to buy all the things they would like to buy. Shops, supermarkets, auto-lots may burst with stuff; but they are there for display only; Good Things which are within a man´s reach, but never all within his grasp. People cannot act like children in a supermarket and take home all the stuff they want; they have to pay for them first. It is expected that people try to do their best they can with their limited income to maximize their well being. This means that they have to do anguish choices: given up some quantity of a stuff just to have a little more of another. This given up is what economists mean by scarcity. No scarcity means that people can have it all and that they don´t have to give up anything at all.

The market makes available a dazzling array of products, but every acquisition is simultaneously a deprivation of something else, so scarcity reigns supreme. The more we have, the more we lack. Production and distribution are arranged through the behavior of prices, and all livelihoods precariously depend on getting and spending. Therefore, insufficiency of material means to fulfill all our wants (scarcity) becomes the explicit, calculable starting point of all economic activity. We cannot tell an average family or an individual struggling to have ends meet, from paycheck to paycheck, that there is no scarcity anymore.

John Kenneth Galbraith assertion that, we, in developed countries, live in an affluent society because industrial productivity have grown so high that "urgent goods" have become plentiful is a naive conception of scarcity. It is true that almost all, in those societies, can afford some regular food, some clothes, and minimal shelter; and the basic necessities of the homeless and the needed could be easily provided. But that is not the point, since almost nobody in those societies is contented with only having their basic necessities met. It is the disparity between wants and the means for their fulfillment (enough income) that define scarcity. That is exactly why Marshall Sahlin elucidated that the original affluent societies are the aboriginal Australians, the Bushmen of the Kalahari in Africa, the hunters and gathering natives of the Labrador Peninsula in Canada and Tierra de Fuego in Argentina, and others; because, they enjoy a "kind of material plenty", even if they don't have running water and electricity.

According to Sahlin the motto is: want not, lack not. The wants of those people are so low that their means for fulfillment are plentiful. A study of aborigines in Australia by McCarthy and MacArthur (1960) showed that those people don't work hard and they don't work continuously. Their subsistence quest would stop when they had procured enough for the time being. They worked an average of 15 hours a week. The time they don't work in subsistence, they pass in leisure or in leisurely activities such as taking long daylight naps, playing with children and others, all night partying, visiting friends in other camps or enterteining friends from other camps, and enjoying the nature that surrounds them. Consequently those people are free of material pressures because they don't have to give something for something else; in a way they have it all and live in a world of plenty, all their wants and needs fulfilled to the fullest. Another way to plenty is to practice the Buddhist Zen approach which teaches us to give up all wants and desires and dedicate ourselves to contemplation and meditation for happy and meaningful lives.

What is the use of economics for the Bushmen of the Kalahari? None at all. Not for distribution or consumption because everybody gets all what she/he wants to the point of satiation. Neither production because of the simplicity of technology and the easiness for anyone of acquiring the means of production from materials which lay in abundance around them and which are free for anyone to take: wood, reeds, bone for weapons and implements, fibers for cordage, grass for shelters, etc.; and finally, it is not even useful for making economic choices because they don't have to make any.

Firulaith (talk) 04:19, 2 April 2015 (UTC)

Firulaith (talk) 06:21, 3 April 2015 (UTC)


 * Thank you very much for your thoughtful answer. I can only say that I (and my students) resemble Bushmen more than the anxious consumers you describe in your early paragraphs.  In the US, we have a sharp division into the haves and have nots that may not exist in European societies.  About 40% of the population sometimes go without food, shelter, education, or medical care even when they work two full-time low-pay jobs, so for them scarcity is a major concern.  But there is another 40% of the population who never go without anything they want -- to desire something is to have it.  I'm lucky enough to be in the upper 40%.  No sooner do I desire something than I use one-click shopping on amazon and I either have it downloaded instantly or at worst have to wait a day or two for it to arrive in the mail.  And, if I wanted to only work 15 hours a week, I could get away with it.  I work hard because I enjoy hard work, but I talk to many people who are embarrassed by how much money they have and by how little work they have to do to get it.  And yet, I still live in an economic world.  I still buy and sell.


 * The question then is whether the science of economics can contribute ideas to the problem of keeping people in my lucky position busy, honest, and non-wasteful -- the latter being especially important. Or is economics only the study of scarcity, and do we need a new science to deal with plenty?  Rick Norwood (talk) 12:53, 2 April 2015 (UTC)


 * It seems that we are getting somewhere.


 * I never have proposed to economics as the study of scarcity but rather as the study of how people and society deal with it. As such economics is right on the mark, along with sociology, psychology, and politics for tackling the puzzling problem of the existence of outright scarcity for many in the land of plenty. The proposed definition of economics comprise both the study of production of goods and services and derived phenomena (distribution, consumption, savings, investing and exchange), as well as the private and public choices concerning the use of scarce resources (means) available. Scarcity is the starting point of each and all of the mentioned phenomena.


 * Production is a way of dealing with scarcity because it provides wanted or needed goods and services not available in nature with the required specifications. And decisions to choose one thing over another stem from the budget constraints (scarcity of means) of individuals, families, and government.   Firulaith (talk) 22:15, 2 April 2015 (UTC)