Founder of the MIT graduate school of
economics, and economic adviser to President John F. Kennedy, Paul Samuelson was the first American to win the Nobel Prize for economics (1970).
Why
study economics? The author
says that money matters, as the science of money provides the basis of civilization. Without a rudimentary knowledge of economics, the dice are loaded against you. But beyond money, what matters most in an affluent society is the quality of life.
Economists do not merely describe the basic facts of life, they hope to improve the quality of
Economic life. Economics, says the author, is the oldest of the arts and the newest of the
sciences because it combines features from both the humanities and the sciences
Economics is the study of how people choose to use scarce or limited resources such as land, labor, capital to produce various commodities and distribute them. (What goods to produce, how, when and for whom).
The study of statistics is of special importance to the study of economics, because governments and corporations issue vast amounts of numerical data. Many of the most important applications of mathematics are in the field of economics. But because of the complexity of human and social behavior, economists cannot perform controlled experiments or attain the precision of the physical sciences.
As in the other sciences, how we perceive the observed facts depends (to a large extent) upon the theory or model we adhere to. In other words, it is difficult to separate the subjective element from the objective. Further, economic “
laws” do not have the force of physical laws – they hold good only on an average, with a large number of exceptions.
Many of the economic paradoxes given in this book arise because what is true of a part (an individual) is not necessarily true of the whole (society).
The ideas of economists and philosophers(whether they are right or they are wrong) are more powerful than is commonly understood. The critique of capitalism was the work of an economist (Karl Marx). And political freedom from tyranny was closely related to freeing markets from state regulation.
The author says the economist is (or should be) interested in the working of the economy as a whole instead of the effect on any particular group.
A broad range of opinions – ranging from Adam Smith, Keynes and Marx to Galbraith and Friedman – has been presented in this book. The author, wisely, has kept himself in the background.
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