economics definition
Most of the sciences known to man since ancient times until the present time are concerned with reaching solutions or explanations that clarify issues or treat specific problems. The importance of the economy and its main subject, which was keen to study these relations, which turned into an economic problem with the passage of time; Because of the endless human needs with few or scarcity of means or resources for them.
Economics is the study of scarce resources and their role in fulfilling needs. Economics is also defined as the search for the appropriate way or way to benefit from and exploit resources, according to the pattern that suits societies and their needs. The economy is keen to find the best suitable alternatives to treat scarce resources, and seeks to explain economic phenomena. And anticipate the events affecting the future of the economy.
theories of economic thinkers
Economics includes several theories that constitute means or tools that help explain and study economic phenomena, formulate appropriate solutions for them, and prepare a set of future expectations based on the data of each economic theory. The following is information on economic theories according to the opinions and ideas of the most important economic scientists and thinkers:
Adam Smith's theory
Adam Smith relied in his study of economics on the philosophy that concerned the study of human societies, and Smith was able to reach a theoretical conclusion indicating that people act based on their interests; Therefore, they have the ability to produce services and products that are important to them as a community; That is, in the form of one group, and this intellectual conclusion was called the invisible hand, and Smith explained this theory by providing examples about various industries and professions. of bread, and thus all other industries operate, and these ideas were later known as the market economy.
Karl Marx's theory
Karl Marx's theory differed from Adam Smith's theory. Marx saw that the capitalist ideas expressed by Smith are unstable, and that the profits achieved by factory production result from their exploitation of workers. He pointed to the existence of class struggle resulting from capitalism, and Karl Marx predicted the collapse of capitalism and the interest of societies in communist socialism which represents his economic thought; That is, workers own the means of production, and Marx's ideas were known as the socialist economy, but Marx's intellectual theories did not succeed; As a result of two reasons:
The socialist economy was inefficient in the production of products.
Over time the average income of workers has increased; This contradicts Marx's theory of factories exploiting their workers for profit.
John Keynes' theory
The scientist and economic thinker John Keynes was interested in following up Smith's capitalist theory and ideas, and was able to deduce a set of theories that did not agree with Marx's views; Where Keynes was interested in studying the impact of governments on capitalism, and during the period of Keynes' study, the impact of the Great Depression on the economy was clear. He saw that the only way out of this situation was for governments to seek cooperation with the private sector; By providing him with the money needed to support the demand for services and goods, and with the passage of time Keynes' ideas turned into an economic system known as Keynesian economics.
economic systems
Since the spread of production in human life, many economic systems have appeared, and these systems have been applied based on the nature of social life prevailing in every human society; Which led to the development of the history of the economy in the lives of peoples, and the following is information about some of the most important economic systems:
The primitive communal system: It is the first economic system to appear in human history; Where humans relied on primitive tools in production, and work and professional experiences were limited, people relied on working in groups to adapt to nature, and lived together within tribes based on traditions, and production was distributed equally among individuals.
The system of slavery: It is also known as the slavery system, and it appeared after the primitive communal system, and relied on the exploitation of individuals for each other, and the emergence of class differences, so work became limited to individuals from the slaves; This led to the emergence of the term slavery society, which was divided into two categories, the slaves and the masters.
The feudal system: It is the system that replaced the system of slavery, and depends on the existence of property and production tools that represent land in the hands of individual feudal lords who exploit individual farmers. The feudal system includes the spread of feudal property in the lands of villages and cities; This reinforces the exploitation of the population living on these lands by the feudal lords.
The capitalist system: It is a modern economic system compared to the previous two systems, and it is concerned with achieving profits and promoting trade exchange, and the means and tools of production own a certain group of individuals called capitalists, as for individuals who constitute the large segment of society, they are the workforce that works in private production means. with the capitalists.
The socialist system: is the economic system that depends on the community's ownership of all means and production tools; That is, strengthening the existence of collective ownership, and this economic system seeks to provide all the needs of individuals, but it leads to a noticeable discrepancy between wealth and the average individual income; As a result of the variance in the quality and volume of work.
economical development
Economic development is one of the most important factors and factors influencing the economy, as it includes all means that contribute to changing the economic structure, which leads to the transfer of the national economic situation in a particular country from a decrease in production efficiency to an improvement in production levels, during a state of equilibrium relations between production sectors.