Ludwig von Mises Institute

Economics

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Economics, according to a classical definition, is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Greek oikonomia ("management of a household, administration") from oikos ("house") and nomos ("custom" or "law"), hence "rules of the house(hold)".[1]

For the Austrian school, Economics deals in general with the action of men to satisfy their desires, and, specifically, with the process of exchange of goods as a means for each indi­vidual to “produce” satisfactions for his desires. These goods may be tangible commodities or they may be intangible personal services. The principles of supply and demand, of price determi­nation, are exactly the same for any good, whether it is in one category or the other.[2]

Economics and ethics[edit]

Economics is a value-free, theoretical science and as such avoids any judgment of value. It is not its task to tell people what ends they should aim at. It is a science of the means to be applied for the attainment of ends chosen, not a science of the choosing of ends. Ultimate decisions, the valuations and the choosing of ends, are beyond the scope of any science. Science never tells a man how he should act; it merely shows how a man must act if he wants to attain definite ends.[3]


References[edit]

  1. Harper, Douglas. "Online Etymology Dictionary - Economy", referenced 2009-04-26.
  2. Murray N. Rothbard "11. Types of Exchangeable Goods", Man, Economy and State, online edition, referenced 2009-04-26.
  3. Ludwig von Mises. "3. Economic Theory and the Practice of Human Action", Human Action online edition, referenced 2009-04-26.

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