The Silent Economist

Category: Economist

  • What Is Economics All About?

    You will get many definitions explaining what Economics is all about.

    The key point about Economics in my opinion is that it is the study of choice.

    We live in a world where there are unlimited wants and limited resources. In essence this explains almost everything that you read or hear in the news.

    Due to this fact we constantly have to make choices about what wants we want to fulfil with our limited resources.

    Many people will tell you that Economics is all about money. However this is not strictly true. Money is what is called a medium of exchange, it allows us to swap the goods and services that we are individuals create for those created by others.

    This leads us to general meaning of the word Economics, that it is

    • of or relating to the science of economics
    • using the minimum of time or resources necessary for effectiveness
    • financially rewarding

    The price that we pay with the money we have reflects the relationship between the changing want and / or the changing amount of the resource of a good or service.

    As I write (Sept 2026), the price of oil is rising. In this case the amount of the resource is being restricted because of unrest that is influencing the flow of oil through the Strait of Hormuz and the Bab al-Mandab Strait.

    When prices rise, two things happen. People will make a choice to try to supply more of the good or service due to the price being higher and in theory there is more profit to be made.

    People will make a choice to demand the same amount of the good or service or less of good or service because when prices rise if they continue to buy the same amount, then they will have to choose to less to spend of other goods and services.

    A typical comment from a student in class to a request they are not keen on, will be:

    “I don’t have a choice, do I?”

    Yes they do, everyone has a choice, it’s just that they might not like the choice that they are being given.

    Lionel Robbins, the British Economist wrote:

    “”Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

  • Origin of the word – Economics

    The modern English word Economics derives from the Greek word – Oikonomia.

    Oikonomia itself is a combination of two Greek works

    “Oikos” and “Nomos“

    Oikos — meaning more or less the household or family estate — and Nomos, which can mean rules, natural laws or laws made by the government, but which in this case primarily means “wise laws” or “rules of thumb.”

    Image of Xenophon. Copyright of the Museo Nacional del Prado, Madrid.
    Xenophon

    Thus the book Oikonomia, by the Greek author Xenophon, is probably best translated as “rules of thumb for estate management.”

    Xenophon was a soldier who became one of the most influential authors from this ancient world.

    In his book he developed some key ideas including

    • Wealth depends on use, not possession. Something is truly wealth only if a person knows how to use it beneficially. A horse, land, or money can be an asset or a burden depending on the owner’s knowledge and judgment.
    • Management is a skill. Household administration as a form of expertise that can be learned and applied.
    • Agriculture is the ideal occupation. Farming is praised as being both profitable and morally beneficial.
    • Leadership and organization matter. A good manager motivates workers, organizes resources, and creates order.