Retrospectives: On the Definition of Economics

Abstract

Modern economists do not subscribe to a homogeneous definition of their subject. Surveying definitions of economics from contemporary principles of economics textbooks, we find that economics is the study of the economy, the study of the coordination process, the study of the effects of scarcity, the science of choice, and the study of human behavior. At a time when economists are tackling subjects as diverse as growth, auctions, crime, and religion with a methodological toolkit that includes real analysis, econometrics, laboratory experiments, and historical case studies, and when they are debating the explanatory roles of rationality and behavioral norms, any concise definition of economics is likely to be inadequate. This lack of agreement on a definition does not necessarily pose a problem for the subject. Economists are generally guided by pragmatic considerations of what works or by methodological views emanating from various sources, not by formal definitions: to repeat the comment attributed to Jacob Viner, economics is what economists do. However, the way the definition of economics has evolved is more than a historical curiosity. At times, definitions are used to justify what economists are doing. Definitions can also reflect the direction in which their authors want to see the subject move and can even influence practice.