why economics is a social science essay

why economics is a social science essay

The Significance of Economics as a Social Science

1. Introduction to Economics as a Social Science

As we have seen from the brief historical sketch, economics has traditionally been defined as the science of how to make a living. Eliminating hunger, poverty, and misery is among the oldest of economic objectives. Equally important in earlier times was the desire to build public and private wealth. Only more recently has the vision of wealth been widened to include many non-economic objectives, such as health, security, convenience, justice, and the pursuit of happiness. Such non-economic factors are recognized to play a crucial role in many important decisions, so economics has extended its range beyond the old definition. In the modern conception, then, economics falls largely within the domain of decision theory. At the heart of decision theory is the problem of choosing. The decision problem for individuals is simply to choose the course of action that is most desirable in light of all desired consequences, whether immediate and tangible or distant and intangible.

2. The Interdisciplinary Nature of Economics

Interdisciplinary approach in economics is the consistent implementation of such theory as the “homo economicus” thesis. “Homo economicus” is the representative individual of economics. Since he makes economic decisions when faced with unlimited wants yet limited resources, his decision-making has assumed a certain systematic character. If rigorous theory is formulated about the representative individual, it becomes possible to investigate the human being in his every aspect and draw some conclusions. Namely, interdisciplinary approach is the result of such studies made on the superstructure of an individual especially designed for the economy. The concept of economic rationality is considered to be the core of the myth of “homo economicus”. However, the “rational individual” is really not a dogmatic concept. His rationality can be risky, his needs internal or external, his wants varying by habit or changing over time in accordance with déjà vu or otherwise.

3. Economic Theories and Their Impact on Society

After all, what relationships are established between economic analysis and other forms of knowledge? At a first level, we can infer that this connection refers to the application of economic theories to several phenomena studied from other fields of science. It is common for economic analysis to use knowledge from these other areas of the social sciences to undertake its investigations. Thus, economic science is considered one of the social sciences. Indeed, we consider that it is one of these in most of its occurrences, noting that as an exception, its methods must be close to the natural sciences, for example, in its logical positivism or its Marxist corollary.

Economic science has a profound impact on the various social sciences and is one of its inextricable interconnections. This relationship is multilateral and multiple ways exist, though not all of them lie the same way. These linkages are related to the development of theories of economics, their application, and assessment. As for the subject of Economic Theory, it comprehensively encompasses the great progress of mathematics capable of integrating micro and macro theories, thereby constituting them as fundamental components of both positive and normative theories. Once it is part of other fields of knowledge, economic analysis can deepen its borders if it interrelates with developments from other sciences. With this study, it recommends options for action and intervention, especially through the underpinning of economic policies.

4. Economic Policies and Their Social Implications

Concern for economic policies arises from the way in which economic activities in groups are structured and the ethical underpinnings of each society, regardless of its economic system. Development of the various economic institutions of society through time is evolutionary in the sense that policies are based on historical precedent or justified by ongoing historical process. The ethics of policy questions generally revolve around personal, social, or human interactions that result from the relationship between economic behavior and ethical values. The association of economic behavior with ethical values to be established through individual economic analysis will influence the character of the social science as a whole.

One reason is that government policies directly influence or are directly responsible for a large component of a modern industrial economy’s total output and establish the conditions of social justice. A second reason is that the price system in the domestic economy of a modern industrial state is largely a by-product, and not a major cause, of economic activity in general. This means the price system is not a significantly powerful force regulating the way in which modern economies behave. Not only does this condition merit special attention to the development and functioning of institutions that uniquely identify the democratic form of economic union with the economy, but it also implies that the policies of government are especially influential subcategories of society.

Economic policies are another focus of economists’ activities. Economic policies – actions, especially by government, that affect the quantity of goods and raw materials available – primarily affect the overall level of economic activity and the distribution of income and wealth. Individuals, business firms, labor unions, and trade associations may also establish policies that are economic in character. Although the action of interest groups and the development of private economic policies are major concerns of policy economists, the most significant policy questions are those made by government, for two reasons.

5. Conclusion: Economics as a Catalyst for Social Change

In response to these criticisms, some heterodox economists have adopted an epilec

While the criticisms of the role and substance of economics would appear to be justified, the discipline’s virulence to self-criticism and the absence of a paradigm shift as graphically demonstrated by the continued dominance of the classical approach make economists ignore the distinction between saving the philosophy of trust and confidence in science and technology. That notwithstanding, economics scholars and policy practitioners have conducted a few reviews of the role of economics in society. For instance, In addition, it has been documented that investment in defense research that significantly elevated industrialization and technological advancement underscored the importance of strategic studies. Similarly, the women’s movement noted that gender, family studies, and feminist economics are integrated in the discipline as a subordinate agenda. Furthermore, Tibull and Pavcnik observed further that Africa and developing countries have been colonial appendages and their economic policies are not in consonance with global players.

Over the years, the discipline of economics has been the center of controversy. Since its inception as a field distinct from its parent discipline – political economy, the inadequacies of classical economists to ‘modernize’ the study of economics saw a shift from a study of a wide array of socio-economic problems to a positivistic quantitative analysis characterized by mathematical analysis and econometric modeling. Due to its preoccupation with erudite and technical problems, it is indeed too removed from the exercise of power. This conceptual and philosophical problem of economics as a scientific and social science has led to the economics profession being accused of “physics envy.” That is, the economics profession seeks to emulate the precision and the high degree of reliability and validity that is characteristic of physics in solving a given problem.