Economics is a social science that seeks to understand how different societies allocate scarce resources to meet the unlimited wants and needs of its members. As with any social science, economics is concerned with human social behavior--behavior of individuals and interaction among these individuals. What makes economics notable among the other social sciences is that this particular discipline addresses the necessary requirements for human survival and sustainability.
Some might label economics as the science of human progress; that is, how choices are made such that living standards of individual human beings improve. This is not to say that economics only has comment for the accumulation of material wealth. Improvement in living standards includes:
In addition, improved living standards support greater levels of literacy and education necessary to sustain political systems that celebrate human initiative, creativity and spirit.
We might view an improvement in the Standard of Living as a problem of production with its foundation in technological expertise and the accumulation of human knowledge. However, even if we overcome this technological problem, as we have in much of the world, difficulty in the distribution of what is produced prevents a significant number of individuals from enjoying the fruits of human progress. This problem of distribution is often rooted in weak political institutions and ineffective methods of governance. And yet the strength of the political institutions depends much on the level of education of the governed. Human progress is greatly facilitated with growth in educational attainment.
The study of economics begins with an understanding of technology, the creation of new technology, and the efficient use of that technology all to address the problem of production . But just as important, an understanding of the workings of an economic system must acknowledge the political system that exists and the potential for political change to address the problem of distribution. An economic system must provide for the physical needs of human beings and, just as important, satisfy their wants and desires that provides much of the incentive for human progress.
The past generation has provided witness of amazing events in the economic progress of different nations. Economists have been impressed with the extraordinary rate of economic growth in much of Southeast Asia. Huge transformations and transitions have taken place in Eastern Europe and the nations of the former Soviet Union. Socialism has given way to the market-oriented ideals, the uncertainty, and the confusion that are part of the promise of capitalism. The United States has experienced several prolonged expansions in the late 1980's, mid-1990's and mid-2000's such that many of the problems of inflation, unemployment, and stagnation seemed to have been eliminated. And yet, economic history and the financial crisis ('Great Recession') of 2008 has taught us that economic success should not be taken for granted -- downturns do appear and reappear.