Economics as the Study of Scarce Resources

This video explains why many economists define our domain of study as “the study of scarce resources”.

[galangal]

I like these presentations for the clarity of language. Sounds like economics is the study of optimisation problems involving finite resources.

[AlessandroBottoni]

This is exactly the way I was presented this discipline at the university, forty years ago. It is by far the best and most useful way to think about economics.

[asorata]

The study of economics as the study of the optimal use of scarce resources is a paradigm that imposed itself in economic theory when the social danger that an economic theory that was based on the production of wealth and its distribution to those who participated in the economy was realized 'economic activity. The existence of a profit that went almost entirely not to the workers (who produced the wealth, allowed the productive apparatus to function and created market demand) but to a limited group of owners of financial capital was something that had to be kept hidden. With the advent of marginalism and the subsequent methodological arrangement due to the formulation of L. Robbins, economic theory began to become an abstract logical game, very distant from the reality it claims to explain. And this is one of the reasons why economic theory today is unable to adequately represent economic reality. A paradigm shift is necessary, otherwise the theoretical schemes of economics risk being just abstract logical exercises.

[aliozsoy]

"Political economy" -which was the original name of the dicipline- was a better term. This new and official definition is nothing more than engineering, I think. What source is "scarce" is mainly determined by politics and property relations.

[Piovesan]

I do not agree. Economics studies “choices when there is scarcity” not “scarse resources”. If people, firms or governments do not have “choice” there is not economics.