The Fellowship of Economics

The essence of Economics or Political Economy as it was called earlier (According to Adam Smith) was to provide a good livelihood for the people and also to bring in money for the state. Nowadays, economics has got lot many divisions and specialities, that I feel the essence is getting compromised.

These are some of the subjects which are closely related with economics.

Anthropology is the science that deals with the origins, physical and cultural development, biological characteristics, and social customs and beliefs of humankind.

Economic anthropology analyses decisions and behaviour of economic agents who are embedded in the networks of social relationships and cultural influences. Economic Anthropology is directly concerned with the most central anthropological issues of human nature, choice, values, and morality. [Thomas 2006]

Geography is defined as the science dealing with the areal differentiation of the earth’s surface, as shown in the character, arrangement, and interrelations over the world of such elements as climate, elevation, soil, vegetation, population, land use, industries, or states, and of the unit areas formed by the complex of these individual elements. []

Geography forms an integral part of Environmental Economics, which studies the externalities, both positive and negative, arising out of human activities.

Moreover, natural endowments have a significant correlation to the natural progress of an economy. Studies have shown that nations with abundant natural resources have grown faster.

Geographical factors can lead to poverty also. Jeffrey Sachs, in his book ‘The End of Poverty’ has given an account of this.

Demography, the study of Population draws extensively from the science of geography.

History is the branch of knowledge dealing with past occurrences. Tirthankar Roy, an Economic historian says that Economists engage with history from a desire to make the theory of economic growth more complete and intelligible. Without comprehending the history of Britain during the 1700’s one could never understand what Adam Smith tried to say. Students find Classical theories to be otiose, due to their lack of understanding of history.

Political science or politics seem to have attracted a lot of ire, but with out a proper political institution, there will be no freedom. It is a branch of social science dealing with political institutions and with the principles and conduct of government. It is therefore essential that economic policies can be framed keeping the objectives of the political institution prevailing. ‘The disjuncture between economics and politics in India’s democratic system has also been growing’ says Bimal Jalan in his book ‘The Future of India’.

Psychology is the science that deals with mental processes and behaviour. Theories like consumer preferences, irrational exuberance and specializations like behavioural economics and game theory draws heavily from psychology. Behavioural Economics is the combination of psychology and economics that investigates what happens in markets in which some of the agents display human limitations and complications. [Mullainathan and Thaler]

Sociology is the study of human social behaviour, especially the study of the origins, organization, institutions, and development of human society. Economic sociology has emerged as a separate branch in Economics; Robert Gibbons of MIT defines it as the sociology of economic actors and institutions.

Philosophy is the rational investigation of the truths and principles of being, knowledge, or conduct. J D Sethi, who specializes in Gandhian Economics, said that ‘Science of Economics is in crisis. Indeed, the main reason for the crisis is that modern economics has no philosophy whatsoever’. To understand an Economist’s theories, we ought to know the prevailing philosophy at that time. Moreover, debates were carried out to decide whether Economics was a normative science (based on values) or a positive science (based on empiric).

Thus, it becomes pertinent that the teaching of economics also touches subjects like history, psychology etc so that the student gets a more realistic picture of the event. These days, economics has become a strict discipline with various specializations and one who ventures into one specialization is unaware of the effects of variables which is outside his or her area of interest. I do not know if ‘division of labour’ is applicable in such cases as it tends to distort the real picture. Thus the need arises for a more comprehensive learning of the social sciences.

Author: Alex M Thomas

A passionate student of economics!

10 thoughts on “The Fellowship of Economics”

  1. Very logical interpretation of the relavance & scope of Economics. A comprehensive learning of social sciences is difficult because of the time it takes, but at the end of the day it is necessary to get a clear picture.

  2. Although it’s implicit, you could include mathematics in there as well.

    I have a strong bias against philosophy. I think an economics student should have courses in science, rather than philosophy.

  3. Parseval,

    Mathematics is a tool of analysis. That is why it is not included. Moreover mathematics helps the economist in simplifying and analysing the information gathered.

  4. Alex,

    While Mathematics is indeed used as a tool for analysis, it’s the “language” of any science, including economics. As you would undoubtedly know, statistical techniques and empirical correlations usually serve as an economists primary mode of attack in understanding or verifying a theory.

    The mathematical formalism of economics is important to economic thought, even when the ideas can be qualitatively explained. I think you’d be interested to read this article by Paul Krugman.

    I also think you’d be amused to hear that most of my colleagues consider economics as a ‘loose’ or soft science, as they claim that some economists (especially policy makers!) tend to forget the limitations of mathematical assumptions while making predictions.

  5. Parseval,

    I think the beauty of economics lies in the fact that, it is both an art and a science. Social Science subjects supplement the discipline of economics and Mathematics help in analysis. If one dislike either of them, then it will be difficult to understand and explain the true economic process which takes place.

    Moreover, it is the case or problem at hand which determines which tools or methodology to take up. Some go for an intensive quantitative analysis which some opt for the qualitative one. Disliking either of them will not do justice to the problem at hand.

    Some issues require a qualitative approach, while some do not. Again, using the tools of mathematics excessively to analyse ‘economic events’ makes the discipline appear ‘arcane’, though some top journals enjoy excessive mathematics and econometrics whether required or not!

    Thanks for the article tip. 🙂

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