Economics is an interesting concept that is important to the lives of practically all people, yet very view people seem to know much about economics or why they should care. The University at Buffalo (a great public university that is also part of the US National Register of Historic Places) and their department of economics provides a very good definition of economics that explains what economics are in a way that is able to quickly display the importance of comprehending it: "Economics is the study of scarcity and its implications for the use of resources, production of goods and services, growth of production and welfare over time, and a great variety of other complex issues of vital concern to society." Basically, this means that economics is about how creatures like humans use and distribute resources, goods and services when such things are limited, which means economics will always be around as long as people utilize resources and goods & there are limits to what resources are available. The most important form of economics that talks about how small groups, especially individual consumers and firms, distribute resources, production of goods, and services is microeconomics. Consumer theory is the smallest form of microeconomics that deals with behaviors of the household. This looks at the economic measure of happiness, which tends to good up as consumption of certain goods increases.
Many people have written about microeconomics throughout human history, which shows how important it is for people to see what systems are used to distribute services & goods on a local level when it comes to how we and other people exist as a civilization. One of these people is Adam Smith, a Scottish philosopher and political economist who wrote the book An Inquiry into the Nature and Causes of the Wealth of Nations (1776), the first comprehensive system of political economy. In this book, Smith would describe the concept of markets for economies. Markets are many times understood as complicated engines for capitalism and related to things like stocks and private property. However in microeconomics, markets can apply to systems like socialism, feudalism, and non-capitalist systems. This is because the definition of a market in economics is simply the means by which goods and services are exchanged between buyers and sellers by being in contact with one another, either by being in direct contact or through agents or institutions. If you have a child trading a playing card with another child in return for a few pieces of candy, then you have a market. Another micoeconomist, French economist A. Cournot, defined markets as so: "Economists understand by the term Market, not any particular market place in which things are bought and sold, but the whole of any region in which buyers and sellers are in such free intercourse with one another that the prices of the same goods tend to equality easily and quickly."
Another economist and person who talks a lot about microeconomics is British economist David Ricardo (though, he also did write pieces about international trade and macroeconomics from time-to-time as well) and Nobel Prizee winner Ragnar Frisch. All of these people are individuals that will be discussed as I talk more about the genuine history of microeconomics with posts that will each be at least 600 words long and will part of a segment I will call 'History of Microeconomics'. Hopefully, these posts and explanations on the history of economics on the small scale will make everyone a little smarter and explain why human beings need to understand their local economies!
Originally posted on Super Short History. Hive blog powered by ENGRAVE.