Explain the nature of Economics in detail.

Ans.

There is a great controversy among the economists regarding the nature of economics, whether the subject ‘economics‘ is considered as science or an art.

Economics as a Science:

Before we start discussing whether economics is science or not, it becomes necessary to have a clear idea about science. Science is a systematic study of knowledge and fact which develops the correlation-ship between cause and effect. Science is not only the collection of facts, according to Prof. Poincare, in reality, all the facts must be systematically collected, classified and analyzed.

There are following characteristics of any science subject, such as;

(i) It is based on systematic study of knowledge or facts;

(ii) It develops correlationship between cause and effect;

(iii) All the laws are universally accepted;

(iv) All the laws are tested and based on experiments;

(v) It can make future predictions; and

(vi) It has a scale of measurement.

On the basis of all these characteristics, Prof. Robbins, Prof Jordon, Prof. Robertson etc. claimed economics as one of the subject of science like. physics, chemistry etc. According to all these economists, ‘economics’ has also several characteristics similar to other science subjects.

(i) Economics is also a systematic study of knowledge and facts. All the theories and facts related with both micro and macro economics are systematically collected, classified and analyzed.

(ii) Economics deals with the correlationship between cause and effect.

For example, supply is a positive function of price, i.e., change in price is cause but change in supply is effect.

(iii) All the laws in economics are also universally accepted, like, law of demand, law of supply, law of diminishing marginal utility etc.

(iv) Theories and laws of economics are based on experiments, like, mixed economy to is an experimental outcome between capitalist and socialist economies.

(v) Economics has a scale of measurement. According to Prof. Marshall, ‘money’ is used as the measuring rod in economics. However, according to Prof. A.K. Sen, Human Development Index (HDI) is used to measure economic development of a country.

However, the most important question is whether economics is a positive science or a normative science? Positive science deals with all the real things or activities. It gives the solution what is? What was? What will be? It deals with all the practical things. For example, poverty and unemployment are the biggest problems in India. The life expectancy of birth in India is gradually rising. All these above statements are known as positive statements. These statements are all concerned with real facts and information.

On the contrary, normative science deals with what ought to be? What ought to have happened? Normative science offers suggestions to the problems. The statements dealing with these suggestions are coming under normative statements. These statements give the ideas about both good and bad effects of any particular problem or policy. For example, illiteracy is a curse for Indian economy. The backwardness of Indian economy is due to ‘population explosion’.

Now an important question arises whether economics is a positive science or a normative science? The economists like Prof. Senior (classical economist) and Prof. Robbins, Prof. Freight-men (modern economists) claimed that economics is a positive science. However, Prof. Pigou (classical economist). Prof. Marshall (neoclassical economist) etc. are of opinion that economics is a normative science.

Economics and Positive Science:

The following statements can ensure economics as a positive science, such as;

(i) Logically based : The ideas of economics are based on absolute logical clarifications and moreover, it develops relationship between cause and effect.

(ii) Labour Specialisation : Labour law is an important topic of economics. It is based on the law of specialisation of labour Economists must concern with the causes and effects of labour-division.

(iii) Not Neutral: Economics is not a neutral between positive and normative sciences. According to most economists, economics is merely positive science rather than normative science.

Economics and Normative Science :

The following statements can ensure economics as a normative science, such as.

(i) Emotional View: A rational human being has not only logical view but also has sentimental attachments and emotional views regarding any activity. These emotional attachments are all coming under normative statements. Hence, economics is a normative science.

(ii) Welfare Activity: Economics is a science of human welfare, All the economists forwarded their theories for the development of human standard of living Hence, all the economic statements have their respective normative views.

(iii) Economic Planning: Economic planning is one of the main instruments of economic development. Several economists have given their personal views for the successful implementation of economic plan. Hence, economics is coming under normative science.

All these lead us to the conclusion that ‘Economics’ is both positive and normative science. It does not only tell us why certain things happen however, it also gives idea whether it is right thing to happen.

Economics as an Art:

According to T. K. Mehta, ‘Knowledge is science, action is art.’ According to Pigou, Marshall etc., economics is also considered as an art. In other way, art is the practical application of knowledge for achieving particular goals. Science gives us principles of any discipline however, art turns all these principles into reality. Therefore, considering the activities in economics, it can be claimed as an art also, because it gives guidance to the solutions of all the economic problems.

Therefore, from all the above discussions we can conclude that economics is neither a science nor an art only. However, it is a golden combination of both. According to Cossa, science and art are complementary to each other. Hence, economics is considered as both a science as well as an art.