Term Paper on "History of Economics Is a Broad Subject"

Term Paper 15 pages (4610 words) Sources: 1 Style: MLA

[EXCERPT] . . . .

History Of Economics

Economics is a broad subject and economists have applied several methods to arrive at conclusions relating to the economy. Economics has to consider various factors like society and the culture which molded the subject. These factors are the basics of economy which everyone in society should look forward to. History of economics and the initiatives put forward to measure them began with the various questions raised regarding the economy. The history of economics is closely related to Robert Fogel and Douglas C. North of the University of Chicago and University of Washington respectively. The central theme of North's approach was with regard to the difference between the rich and poor countries of the world. North was of the opinion that the formation of establishments and its influence on the development of economies over time created this difference. Establishments that affect the economy of a nation are formal systems like legal, constitutional, tax, regulation of the market and insurance and casual systems like ethics, behavior, belief, habits, ideologies and morals. Douglas C. North has encouraged economists to accept the influence of other factors or events. For example, the performance of an economy is related to the circumstance of the time and place. Hence the theory of economy can be studied with respect to the history of the world. (Canterbery, 8)

In the study of economics, the role of mathematical science and other topics with respect to man cannot be avoided. The inclusion of mathematics makes the study of economics a complex one and the inclusion of history restricts the overpowering influence of mathematics on economics. The influence of literature in instituting the behavior of the society towards economics is also noteworthy. The importance of literature has received a better position in the recent past. Certain contributions made by literature towards measuring the existing economics in a society have more precision and significance than the observations made by economists. Few economists of yesteryears were themselves writers, the prominent among them being Keynes. Others who were related to both economics and literature were Robert Heilbroner, Veblen and John Kenneth Galbraith. (Canterbery, 10)

The downfall of the Gold Standard, the uprising of Fascist corporatism in the western part of Europe, the five-year projects of Soviet Union, the Great Depression, the Bolshevik Revolution, the novel business set up of America and the socialization experiments of Austria and Germany revived the role of economists and found a place for them in extending the government decisions. A total revival of the role of economists came up with the Mandarin economists after the war. Their role was further strengthened with the release of the General Theory by John Maynard Keynes in the year 1936. This ideology of government was immediately put in place to resolve all the issues related to the economy. Many parts of Europe, Germany, Britain and France adhered to the guidelines of economists and drafted the welfare state notion to find a stable method to operation the financial functions. This paved way for various norms and reforms in the industrial sector, trade alliances and smartly utilized their banks and treasury to make the economic plan in an equilibrium state. (the History of Economic Thought)

The utilization of government resources like capital and well planned norms for trade between nations assisted in a surprising development of the economy. The strategies of economists gained further importance when colonies turned out to become independent countries which took advantage of economist policies. This success of economists in their role towards government oriented plans resulted in their demand for international organizations like the International Monetary Fund, the United Nations and the World Bank. This situation took an overturn with the depression in the economy during the 1970's and 1980's. Totally new types of economist were required at this stage to create a revival of the declining economy. Economists who were equipped with policies to meet the supply of financial aids were specifically required to reverse the situation of the conservative government. However, the role of economists deteriorated with the emergence of privatization of government owned enterprises around the world which also affected the face of the socialists worldwide. Economists were then restricted to their function in commercialized banks which was based on observation and predictions. (the History of Economic Thought)

The success of an economist lies in his efficiency to influence the society with his arguments. The use of notes, pamphlets and letters by various economists stands proof to this phenomenon. The contribution of economists during the English Industrial Revolution paved way for the twelve hour employment and the employment of children in industries. Economists in the past had to work with insufficient information and so they could not support their arguments with statistics. Instead they had to detail the reasons for a specific rise or fall in the economy. The evaluation of pessimists like Thomas Malthus who studied the relation between population and the availability of food proves this point, which showed that the increase in population in one area, like cities or towns can result in the non-availability of food. (Canterbery, 11)

David Ricardo was a more influential person than Malthus who argued in favor of industrialists, and he had the added advantage of being a member of the Parliament. Other than the oratory skills of economists, they have passed down the scheme of analyzing economic patterns. Hence it is obvious that we should learn more about the social and intellectual side of the thought applied by the economists. The criticism which accrues to the economists relates to their inefficiency in showcasing the importance of the economy under observation. This is because some economists do not consider the facts established by their forerunners and make a totally new approach to the system. After so many years of research and analysis there is no one common system which is jointly accepted by the whole world. (Canterbery, 11)

The characteristics of economics remain to be a vague idea even today. However the lack of clarity is not a feature which is exclusive to economics, since it is witnessed in all subjects. The analysis of the perfect method to understand a subject has remained an important issue for philosophers from the Greek period onwards. A number of scientists and thinkers have worked hard to find a solution to this question. The method of understanding a subject requires a step-by-step scientific procedure. Each and every step of analysis is a continuation of the previous finding and so none of these methods is considered to be an isolated one. Methodology has been a topic of interest for philosophers as well as authors of social and natural sciences. This interest has not spared the field of economics also. Many have indulged in research to understand the approach and epistemology relating to economic science. The most important objective of the economic analysts has been to find a process to understand the causes of change in the market and thereby improve the field of economics, to carry out profit winning changes to the institution of economy. (Chapter 2: A Problem of Knowing)

Our thoughts at any point of time are based on wisdom, information, facts and knowledge which are entirely different concepts. The difference lay basically in the meaning of the words. An observation into the Latin meaning of the words will give us a better idea about the words in question. Factum means some function completed, and facere means to perform a function. Information means collection and arrangement of details in a systematic way by classifying various details into specific titles. Knowledge means the connection between various facts and information. Wisdom is a complex word and implies the scheme of values and the decision to use knowledge. These explanations are however trivial and is related to the users interpretation. Various methods can be used to derive information and conclusion of knowledge. Instinct, perception, reduction, introduction and the ability to create data are examples of the basis of knowledge. However, knowledge should be backed by empirical as well as sensible way of thinking. Earlier, instinct, perception and introspection were significant factors to make a judgment about information though it was later judged as insignificant factors with respect to knowledge. (Chapter 2: A Problem of Knowing)

Economic theory is considered to be a set of tools by certain analysts. These tools can be used to derive interesting opinions and it is also a combination of tools that includes deliberate statements of economic theory. (Samuels; Henderson; Johnson; Johnson, 71) it is a well-known fact that economics is a difficult subject and this is the reason as to why economists are highly sought after so that they can simplify the details into simpler forms which everyone can understand. Certain economists followed a linear method approach with the objective of determining and solving certain data. Classical statistical examinations are normally adopted by this method. Formal observation methods are used to reduce the data in a very significant manner when compared to the informal methods. Thus formal methods… READ MORE

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