In: Economics

Nature of Economics

What is the nature of Economics? Analysis in detail. 


Expert Solution

Explanation - - - - - - - - -

Nature of Economics - - - - - - - - - - - -


Economics is a subject which can be called both as a 'science' and as an 'art'. In some of the universities, it has been categorised as a pure science and the students studying this subject are given a degree of B.Sc. or M.Sc. But in some countries it is mostly categorised as an 'arts' subject. Hence, it can be said that economics has been accepted both as a science and as an art.


Economics as a Science - - - - - - - -


Looking from this point of view, we can say that economics is a science, because it seeks to explain economic phenomena such as consumption, production, price determination etc. Economics explains to us the reason for a given level of demand. It explains how price is determined? How production is determined? etc. In this way we find that economics is a science, but surely it is not a pure and perfect science like physics, chemistry, botany etc. for the following reasons:


1.  The subject matter of economics is not an inanimate object but a living human being who has his own behaviour and that too is an uncertain behaviour.

2.  In other sciences when we study an event or a phenomenon, other things affecting that event normally remain the same but in economics, however when we study an event, then many factors are active at the same time behind that event and, therefore, it becomes difficult to study any one factor, and isolate it from others. 

3.  In other sciences we have the facility of laboratory. 

4.  In other sciences, there is a greater objectivity in our study. The investigator looks at the phenomenon in a more dispassionate manner and is not influenced by his prejudices and own emotions. As against this, in economics, the investigator can not be so dispassionate. His studies are bound to be affected by his background, thoughts, ideologies and preconceived notions. 

Due to the above reasons, economics is not considered a perfect science like other sciences. It is often called a social science because we study human beings and Society. 


Economics as an Art - - - - - - - - -


J. N. Keynes had said, " An art is a system of rules for the attainment of a given end ". When we look at economics from this point of view we find that economics is an 'art' also. The field of, economic planning, public finance, fiscal and monetary policies etc. is an art and only the right type of skills of the policy maker and implementors can give the right results, otherwise not

Thus, we can say that economics can not be a tied to any traditional boundary of a subject; its form and scope has been continuously evolving. This study of economics does not merely lead to greater knowledge but it provides, an intellectual exercise also. The study of economics greatly  helps us to understand, sequencialise and analyse a given phenomenon. The following comment by J.M. Keynes is apt analysis of the nature of Economics.

" The theory of economic does not furnish a body of settled conclusions, immediately applicable to policy. It is a method, rather than the a doctrine, and apparatus of mind, a technique of thinking which helps its possessor to draw correct conclusions. 

Economics is a subject which can be called both as a 'science' and as an 'art'. 

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