Chapter 1: Introduction
Economics is an important study. Most would agree that it is crucial for business, for politics, and for many other aspects of our life. How, then, should we define economics? It may come as a surprise that there is little consensus on this! Perhaps it doesn't matter very much. Economist Kenneth Boulding said that "Economics is what economists do." (He attributed the remark to his teacher Jacob Viner.) John Stuart Mill, one of the greatest economist-philosophers of the nineteenth century, said that it is best not to begin with a definition, but to end with a definition, after the reader has enough examples so that the definition is meaningful. But we shall not follow his advice. A definition is a brief statement of what psychologists call a frame. A frame or frame of reference in this sense is a way of posing and understanding a decision, and psychologists have shown that the way we frame a decision influences the decision we make and the actions we undertake. And as we approach the study of economics, we have to make decisions - decisions about what is more important, what is less important, where the efforts of researchers would be best focused, what can safely be left behind and neglected.