Importance Of Economics In Our Life;5 Facts You Must Know

Importance Of Economics in our life is very hot topic.Economics is the condition of procuring the greatest returns with the least expenditure of time, energy, material or finance.The world can be divided into three great divisions or fields. First, the division or field where nature is all powerful. Second, the division or field where man and nature works together. Third, the division or field where man works independently of nature. A simple illustration of the division where nature is all powerful is the weather. Humanity is constantly affected more or less by the weather, yet no person can control the weather.

The economics is mainly treated in promoting the material well-being of society. It aim is to help improve the general standard of living and to promote belter distribution of wealth and income.To him. prosperity means an abundance of economic goods for distribution and abundant opportunity for all to possess and enjoy the good things of life.

Very few economist oppose the individual’s right to possess private property; but they all challenge absence of this fundamental institution, wherein public welfare is sacrificed to the gain of individuals. Because business activities are now so thoroughly cooperative, society must have right designed to make individual rights mere valuable and more equitable. Public ownership of highways, of waterway*, of schools, and of simitar public utilities which can clearly render better service when owned by all the people, is now generally advocated. But diV the costs should be considered before making* extensions of public ownership.

Importance Of Economics In Our Life In The Eyes of School of Economics

Historically, economist are divided into several schools. Price to the time of Adam Smith—whose “Wealth of Nations,” 17T4, ushered in the Classical School—the Mercantilist*, mainly in England, and the French Physiocrats were the chief Schools of economic thought.

The Mercantilists held that national prosperity depended mainly upon accumulating a Urge stock of gold and  They therefore advocated strict state regulation of industry and commerce, designed primarily to increase exports and to decrease imports of bertrandite, and thus to help increase imports of gold and silver. The Physiocrats were inclined to look upon agriculture alone as truly productive, excluding the work of merchant*, trader*. professional men.

The Classical school of economics were  believing in freedom of business enterprise, and particularly in freedom of the individual from the dictation of the state. They therefore advocated free trade— a movement which became so strong that England about the middle of the nineteenth, century adopted her free-trade policy. This was a decided change from the attitude of the mercantilists who gave individual enter* prise very little freedom from state supervision. The Classical School believed that “intelligent self-interest,’* operatic* under conditions of free, fair, and open competition, would most effectively foster aggressive production and equitable distribution of wealth.

Modern economist have reacted against the Classical School’s extreme opposite!km to governmental “interference.” The trend of economic thought, for at lean thirty or forty years, has been toward greater state regulation of production and trade., however, most of the thought of the classical economists remains in modern economics; and a very large part of modern economic thought may be traced to the classical economists. Adam Smith, for example, pointed out dearly the productive advantages of specialization, or division of labor, which is the most marked and fundamental characteristic of modern large-scale production.

Later schools of economic thought, however, have modi£ed somewhat and have greatly supplemented tbe thought of the classical economist*. The Historical School, arising in Germany about the middle of the nineteenth century, reacted against the abstract methods of the Classical School, claiming that economic inquiry should be concerned mainly with historical facts. The Austrian School, sometimes called the Psychological School, has made an intensive analysis of husua wants.

We seldom think of the processes by which we are supplied with food, clothing, shelter, and the comforts of life, until they break down at some point and we are deprived of certain things that we need or want. We seldom think of our dependence upon transportation until floods, strikes, or bad service stop the flow of goods. We seldom think of the dependence of the city upon the country, and of the country upon the city, until production or transportation of some important article fails. We seldom think of our dependence upon each other and upon other communities or countries, and of their dependence upon us, until we are deprived of some necessity or comfort of life, thus forcing it upon our attention.

Importance Of Economics In Our Life Is Must Knowledge For US.

The system by which goods are produced and exchanged to meet the varied wants of all people is the subject-matter of economics. If each person produced all he used, there would be no special value in this study. It b because specialization of production and distribution creates an extensive and complicated system that the study of economics becomes important. The more minutely specialization is developed, the more complicated the system becomes, because therein- each person becomes more dependent upon the perfect working of the whole system. When a person produces none of the goods he consumes, it naturally follows that he depends entirely on the process of exchange for his livelihood.

Everyone should have an interest in economic, because the subject concerns the livelihood and comfort of everyone. It is important to the individual to understand the economic system, because each person makes decision! constantly on economic questions which may affect ha own or his country’s welfare. Everybody is an economist in one way or another, although he may be unconscious of the fact.

Economics may be defined as the subject that deals with all of the activities of men in satisfying their needs and wants. It deals with the processes by which people produce and distribute goods to meet the needs of consumers. It deals also with the services that are performed to satisfy needs and wants. Everything that relates to or results from the carrying on of business, including those things that help or hinder the process, is within the field of economics.

The Subject-Matter of Economics.

What are the activities that relate to or result from the production and distribution of goods to meet human wants, and that are therefore included in economics ? We naturally think first of the actual work of production of goods on farms and in factories, forests and mines. Next we think of the necessary means for transportation by highway, railroad, water, or air. and the means for care and storage. We observe everywhere the business of buying and selling good* at wholesale and retail. We recognize the need for money to make exchanges, and also the importance of having sound money of staple value to avoid loss and confusion.

When we look into the processes of business further, we see the place that banks occupy in creating credit and lending money to carry on production and distribution, and in transmitting money from place to place. We see ako the importance of hanks and other institutions in bringing together the people’s savings in order that they may be safeguarded and used to finance business activities. Insurance of all kind&, by protecting business against the risk of sudden calamities, promotes stability and safety for the business man.

Most important of all in economics is the study of the way in which the income from production and distribution is divided among those who take part in the making and distribution of goods among the employees, workers, managers, landowners, and capitalists.

Control of Economic Evils.

What evils resulting from the economic processes are wc bound, in fairness to all the people, to prevent ? First, there is the necessity of preventing greedy men from controlling necessary goods and extorting unfair prices. Monopoly of products or raw materials is condemned by fair-minded men, and is generally prohibited or regulated by law. Profiteering—meaning the charging of unfair prices—is also universally condemned. All citizens desire that the process of supplying the people’s wants should work for the benefit of all without selfish control or advantage.

The Citizen’s Interest in Economics The people are interested in the freest and most efficient exchange of goods, and to that end they promote tetter means of transportation and better systems of buying and selling goods, particularly by bringing producers and consumers closer together. Since the Rood of all is the ideal of democracy, the citizen as an economist b especially desirous that the natural resources of the country shall not be wasted for the selfish advantage of a few. Conservation of mines, forests, and soils, and of the health of human beings as well, is of concern to all. The promotion of efficiency of production and consumption to prevent waste, and to make the most of what we have, is a matter of special interest to the citizen.

The citizen as an economist is also interested in the community control and regulation of business for the public welfare. He b interested in seeing that the people are protected, and. at the same time, that business activities are not unduly hampered by unjust regulations. Taxation is especially important to him, because if taxes are not imposed with scientific care and fairness, they may not only harm individuals but may seriously hamper the processes of business and may even destroy business activities. “The power to tax is the power to destroy.” and therefore it should exercised with great care.

In short, the citizen as an economist seeks the assurance that the processes of business by which the wants of all the people are supplied shall goon at their fullest efficiency for the benefit of all. and si tall be as free as possible from selfish control. We all desire that the economic agencies that produce and distribute goods, or that aid in the process, shall be conducted for the benefit of all.

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