Researchers are trying to answer the question of what economics has been studying since about the 18th century. It was then that all the prerequisites appeared for a new discipline to arise that would study the causes of human enrichment. To date, these studies have generated many theories and teachings.
The advent of economics
The production, consumption and distribution of services and goods is what economics studies. The object of her research appeared at the dawn of mankind along with trade. However, until the XVIII century, economic science in the modern sense did not exist, although even then there was economic reality.
A breakthrough for theoretical knowledge of the reasons for the enrichment of some and the impoverishment of others occurred in 1776, when the book by Adam Smith, "A Study on the Nature and Causes of the Wealth of Nations" was published. The English scientist first proposed some theoretical justifications on the relationship of trade, production and money. He became the spokesman and systematizer of those ideas that had long been in the air. Of course, the beginnings of economic science were known to all capable and successful merchants of antiquity and the Middle Ages. But only Adam Smith gave this knowledge a scientific character. Since then, everything that economics studies has been studied through the prism of the works of the famous Englishman.
Key economic issues
The main problem of the economy is that a person has unlimited needs, while the resources surrounding him are not infinite. Because of this contradiction, several pressing questions arise. Similar problems are exactly what economics is studying.
Here are just some of the main questions that she answers: what product is best produced, how is it best to produce, what work should be done, who should do this work, where will its results go, etc. All these economic problems are associated with limited the amount of resources that a person can dispose of.
Production problem
A person can only create the quantity of goods that the amount of available resources allows him to. The best mode of production is precisely what modern economic science is studying. With the right combination of resources and effective methods of processing them, a person can get the greatest result, and therefore the greatest benefit.
For any economic theory, the classification of resources is important. They can be natural. These are the resources that appeared due to nature (for example, wood, water, any crops). At the same time, man was able to achieve his well-being due to the fact that he learned to produce artificial tools to facilitate his work. This is the second group of resources. For example, they include saw, nails, etc. In economic theory, artificial resources are also called capital.
Labor and Capital
Another important resource is labor. This is the totality of all the intellectual and physical activities of people. Natural resources could not help a person if he had not learned to use them. This became possible only thanks to the work of many generations. For centuries and millennia, human peoples worked hard, learning and taming the world around them.
The most successful and useful combination of natural resources, labor and capital is what economics studies as a science. It is important for researchers in this field to find the most effective recipe for human activity, that is, how to spend less resources and time and at the same time achieve the best result.
Economical geography
There are several related scientific disciplines in which, one way or another, the economy appears. They study various aspects of human life through the prism of the production of goods and services. One of these disciplines is economic geography. This term was introduced by the Russian scientist Mikhail Lomonosov in 1751.
But what does science study economic geography? What are the objects of its study? Economic geography covers the organization of economic activity of a company according to a territorial attribute. This is a useful and important science. It helps identify the most effective ways to spend resources and produce goods in a particular region. The world is complex and diverse. Where one method of farming is effective, other methods of production will be unprofitable. Economic geography is needed just to determine what combination of labor and capital will be effective in the studied region.
Production methods
Any product can be produced using different technologies. For example, the same car is produced on the conveyor of a huge plant with automated assembly systems, as well as in a small enterprise with small personnel. The foundations of economic science are necessary in order to answer the question which of these methods of production will be the most profitable and effective.
It should spend as little resources, effort and time as possible. That is why it is necessary to study the foundations of economic science - in order to know which production method will be the best choice for the owner. However, experts do not use vague wording. In economic science there is a clear formula for economic efficiency, which can be calculated by knowing the amount of available resources and other important characteristics.
Division of labor
Economic science posed several fundamental questions for society. One of the most acute among them is the dispute over the division of labor. It consisted in the hypothesis that each person should be engaged only in the business in which he is a true professional.
World economic science debunkes the myth that one worker can be a universal specialist. The farmer will not become a tailor during the day, and in the evening he will not be retrained as a poet. Therefore, economists at one time became the most ardent supporters and propagandists of the specialized education that young people received in higher educational institutions. It is universities that help society most effectively distribute people in the most popular niches. The concept of economic science includes several theories about the correct division of labor.
Distribution of benefits
Economic science is also necessary in order to more accurately determine how to more correctly distribute the goods produced by society. The accumulated benefits cannot be in the same hands. They circulate between people who can afford them. A tool for this process is trade.
Thanks to purchases and sales, goods fall into new hands. This is a natural course of events. However, it is economic theory that determines how best to distribute benefits between members of society (cities, countries, states). Researchers and scientists for several centuries tried to develop systems that would achieve the most equitable distribution of capital. In this case, we are talking about such an order when there is enough goods for everyone, and at the same time some do not have surpluses, while others do not have enough goods.