The study of Economics is a very crucial one and is a professional and technical subject that encompasses a wide variety of domains.My earliest association with this subject was at the Engineering College where we had a full subject on Classical Economics theory.Much of the study of Economics begin with Adam Smith and his "Wealth of Nations" ,which was the earliest attempt at making Economics a full fledged subject matter of concern.
Concept of Economics encompass every -day life and even the running of Governments.But most of the study is largely cluttered by diagrams and graphs.I was listening to a lecture at MIT(Masachussets Institute of Technology) where the speaker called Economics a "dismal science" because the study of Economics is largely associated with scarcity.But is Economics a study of Scarcity ? Not at all. A proper study of Economics and its applications at all levels helps in the creation of abundance and helps societies understand Economic situations.
The good or bad of the study of Economics is the various strategic levels from which matters can be assessed.There is a high altitude level called Macro Economics and a more magnified view at a personal level called Micro Economics and note that the domains are highly interconnected.
For me Economics is just three words .Supply,Demand and Price ..add to that two more riders Utility and Difficulty. Utility and Difficulty pertain to Micro-Economics while Supply and Demand pertain to Macro Economics and Price is a common factor between these two domains. Price is determined by purchasing power on the Micro-economic side and cost of manufacturing on the Macro-Economic side.
The concepts of Micro-Economics is rampant in a Jungle.I call this domain Jungle Economics.In the absence of a well ordained Economic System Jungle Economics prevail.What is Jungle Economics?It is the most primitive form of Economics..where there is zero welfare from any organised body.Every time a Tiger is hungry it has high utility for food that might be difficult to find.When it is young it has the prowess to run behind a deer or an ox..as it runs it is loosing energy making it even desperate for food..if it gets the kill..well and good..for a few days and the cycle restarts again.As it gets older it stops running behind the prey and uses strategy by waiting near a water hole where its prey are constrained to visit and attacks in a spurt...it may attack other carnivores or slip into a nearby village and become a cattle-eater or a man-eater.All that the tiger is doing is Economics..and human beings would behave in the same way if an organised Economic system never existed.In other words the jungle is a "Zero Welfare Economic System" and forms a kind of basis for all forms of Economic Study.Simply said it is a high Utility Environment with High Difficulty atleast for the Carnivores and even some classes of herds.
Let us study the Human Domain.Beating Inflation is the collective activity of Human Economics.The opposite of Jungle Economics is Human Economics.We Humans by nature eat various forms of food and could be called a Herbo-Carnivore.But there are many other demands like Clothing and the like.Much of Human Economics at a Micro-level depends on how one runs oneself.However beating Inflation is the most important challenge of an Economic System in the human domain.Matching Supply and Demand on one side and maintaining a steady price and taxing people with in-ordinate incomes to keep Purchasing Capacity at parity.All these are corner stones of a Human Economic System which prevents the Human Economics going the jungle way.Taxation sometimes help in Collective balance of the Economy preventing Inflation.All Economies Inflate with time but it has to be controlled and processed .Inflation is a scenario of Increasing Prices ..where Demand and Supply are not properly matched or Demand far exceeds the Supply.
Let us understand this a bit deeper. Increase in Population increases Demand.Increasing Demand creates Alternate Demand or the Demand for Substitutes.Government has to constantly tap up Supply.Increasing Supply means increasing production.Increasing Production means scarcity of land because Land is needed for Production,Increasing Production means need for investment and labour that is trained,Investment means inputs from the Banking System, a largely working labour force increases Consumption and putting an elongation on Demand (reason why inflation control is difficult) and add to that the need to Import to meet the Demand..all steps to keep Inflation under check.Organised Economic Systems around the World are in constant effort to match Supply to Demand and an ideal Economic system around the World would be an Import-Export regime with minimum tariffs and duties.
What is the essence of the study of Economics. Primarily to prevent Human Economics falling into the Jungle Economics trap.How can this be done? May be in three ways.Firstly Government must harness all possibilities to induce large-scale welfare in to an Economic System..Secondly the World Community must be more forthcoming in International trade with reduced barriers...and finally improving the Education process , its expanse and deliverables to equip people with skills and knowledge and if World communities focus on the third thing ,with time the first and second will fall in place.