The First Lesson of Economics

Economics is the science that analyzes implications of human choice in the natural world as such.

Economic laws concern the universal form of purposeful behavior, which is always people choosing something rather than something else. Compare it with the law of contradiction, which deals with the universal form of an argument (A and not-A is false). Economic laws are applied to understand real phenomena.

Economics is not the study of what choices people have made, nor is it about why people make the choices that they make. Those are questions for history, psychology, and what German philosophers called verstehen.

Most importantly, economics does not say anything about what choices people should make — that issue must be resolved by ethics.

%d bloggers like this: