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Is Economics as old as the first Transaction between Men? Essay

To what extent do you agree with this statement?

It can be said that economics is as old as the first transaction between men and I completely agree with this statement. It must, however, be noted that the importance of economics in people’s lives has greatly increased over the ages. In days gone by, other things such as religion and tradition had greater influence on people’s lives, whereas today, people are more influenced by economics. As a result of the ever-changing nature of economics, the economic laws that existed in the past would be obsolete in today’s society. In order to have a better understanding of this statement it is important to, firstly, have knowledge of the history of economics and also to study the evidence that both supports and opposes the statement.

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According to Robert Heilbroner “…the perpetuation of the human animal becomes a remarkable social feat. So remarkable, in fact, society’s existence hangs by a hair… in a word, if any of a thousand intertwined tasks of society should fail to get done-industrial life would soon become hopelessly disorganised.” He then goes on to outline the three ways man has found to guard against this calamity. The first of these is the continuity of society by organising it around tradition. This method consists of the various roles in society being handed down from generation to generation according to the society’s customs.

The cycle of son following his father’s occupation keeps the necessary positions in the society full and prevents chaos. The second way in which the problem can be solved is through command, meaning an authoritarian rule in order to ensure that tasks are completed. For many centuries, man has dealt with the challenge of survival through either of these solutions. The third and final way is the market system. The market system is “…an astonishing arrangement in which society assured its own continuance by allowing each individual to do exactly as he saw fit-provided he follow a central guiding rule.” The rule being incredibly simple “…each should do what was to his best monetary advantage.” It was the appeal of monetary gain, rather than tradition or command that leads the great majority to do their job and today keeps our society together.

Economics can be defined as “the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind.” Using this definition it is easy to see the validity in the statement “economics is as old as the first transaction between men.” The objective of man and most other living creatures is to survive. The continued existence of man demonstrates man’s ability to achieve this goal. With the limited resources available to man and his unlimited wants, in order to survive, cooperation within a society is required. This cooperation has ever been present, as trade is thought to have occurred as long ago as 3000BC. This trade is the early form of economics.

On the other hand, it can be said that in the past, economics has not existed. This is because in the past there was no scarcity and the available resources were adequate for sustaining our very basic lifestyles. We were influenced by tradition and command and this paved the way in which our society was run. As Heilbroner says “…as long as the problem [of survival] was handled by tradition or command, it never gave rise to that special field of study called ‘economics.’” However, when the market system came into play and overran tradition and command, economics was developed. “When society no longer obeyed a ruler’s dictates, who was to say where it would end? It was the economists who undertook to explain this puzzle.”

Although, it was very possibly not realised back then, it can be said that economics is as old as the first transaction between men. The importance of economics certainly has increased over the years and the role it plays in people’s lives now is greater than it did in the past. However, I believe that economics has always been one of the key components of man’s survival, whether today or 3000BC. Of course in the past people had wants and need just like we do today and therefore the methods, such as trading, that they used to obtain these things fall under the category of economics.

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