What is Economics?

This post originally appeared on The Finance Buff.

On the EconLog blog, Bryan Caplan reignited a debate about economics that occurs in every discipline: what is the discipline about? What is economics? It’s a good question and fun to ponder, especially because the traditional definitions are all horribly wrong. Economics today is not just about allocation of scarce resources, the study of choices, or the analysis of consequences of policy. Those are part of economics, but economics is much more.

Caplan’s musings were picked up by Russ Roberts at Cafe Hayek and folded into Roberts’ search for examples of “where people had to give up their prior beliefs about how the world works because of some regression analysis.” Caplan also sparked a discussion on orgtheory.net about the relationship between economics and sociology. Is the former just the latter plus math?

As it turns out, I’ve been working on my own definition of economics and I posted a version of it as a comment to Caplan’s post. Neither he nor anyone else has reacted to it (yet). Here’s my slightly more refined version.

Definition. Economics is the study of the causes and consequences of actions and conditions of humans and their societies and institutions.

This definition is a work in progress. To improve it, I would like to hear from Caplan and others as to what my definition leaves out that is critical or includes that is excess.

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