Relationship of Economics with Other Social Sciences Subjects

In this article we will discuss about the relationship of economics with other subjects.

Economics is classified as a social science. This view makes economics an academic relative of
political science, sociology, psychology and anthropology. All of these disciplines study the
behaviour of human beings individually and in groups.

They study different subsets of the actions and’ interactions o human beings. For this reason
they also are sometimes termed behavioural sciences. We may now make a brief review of the
relation between economics and other related disciplines such as psychology and sociology.

Economics and Psychology:

Economics is particularly concerned with consumption, production and resource use by

individuals and groups. Economics is also concerned with the procures by which households
and firms make decisions about the use of scarce resources.

Inevitably, this definition of the ‘territory’ of economics leads to some overlapping with the
other disciplines. Psychologists and economists share an interest in what motivates people to
take certain action.

However the primary interest of economists lies in those actions that are reflected in market
activity or in economic decisions made through government.

Economics and Sociology:

While sociologists are interested in all facts of organised human activity, economists are
interested mainly in organised activities that related o the production and consumption of
goods and services. As a general rule economists assume that individuals pursue their
self-interest and respond to various signals or incentives in the light of that self-interest.

Although this may seem obvious, it is somewhat different viewpoint on human behaviour from
that of psychologists and sociologists. This perspective often leads economists to draw
different conclusions.

Economics and Political Science:

Economics interacts with almost all other academic disciplines. It is inti-mately intertwined
with current events, and it has a significant effect on political events, both domestic and
international. Economics has various things common with political science. For example, in
both subjects we teach public finance, financial relations between the centre of the study as
also the economics of planning.
Economics and Decision Sciences:

Economics is also part of a group of disciplines called decision sciences which includes some
branches of statistics, applied mathematics, operational research, and some areas of
management and engineering. All of these disciplines deal with how individuals and groups
make decisions.

Economists are specifically interested in those decisions relating to production consumption

and resource use. As a decision science, economics is closely related to business and
management courses.

Economics and Statistics:

One major function of an economist is to conduct research. The job of the company economist
is to investigate economic aspects of various decisions Government agencies and private
business firms generate a vast array of economic statistics on such matters as income,
employment, prices and expenditure patterns. A two-way street exists between statistical data
and economic theory.

Statistics can be used to test the consistency of economic theory and measure the
responsiveness of economic variables to changes in policy. At the same time, economic theory
helps to explain which economic variables are likely to be related and why they are linked.
Statistics do not tell their own story.

We must utilise economic theory to properly interpret and better understand the actual
statistical relationships among economic variables.
Economics in relation to other social sciences

Economics is a social science which deals with human wants and their

satisfaction. It is related to other social sciences like sociology, politics,

history, ethics, jurisprudence and psychology. For example, the economic

development of a nation depends not only on economic factors but also on

historical, political and sociological factors. Our country did not have

much of economic progress during the British rule owing to historical

reasons. Again, we had slow but steady economic growth in our country

because of political stability. But in many other countries, there was no

steady growth because of political instability. If there is one government

today and another government tomorrow, there will not be economic

development in that country.

We shall discuss, in some detail, economics in its relation to other

social sciences.

Economics and Sociology

Sociology is the science of society. Social sciences like politics and

economics may be considered as the branches of sociology. Sociology is a

general social science. It attempts to discover the facts and laws of society

as a whole. Sociology deals with all aspects of society. But economics

deals only with the economic aspects of a society. It studies human

behaviour in relation to scarce means and unlimited wants. For a student of

sociology, social institutions like marriage, religion, political institutions

and economic conditions are all important subjects for study. But in

economics, we are interested in them only to the extent that they affect the

economic life of a society. And we cannot properly understand the

economic conditions of a society without considering its sociological

aspects. Though economics is a branch of sociology, we must look at it as a

separate and distinct branch.

Economics and Politics

Both economics and politics are social sciences and there is a close

connection between them. Politics is the science of the State or political

society. It studies about man in his relation to the State.

 The production and distribution of wealth are influenced to a very

great extent by the government. We have economic planning in our

country. And the main aim of planning is to increase the national income

by increasing production and by a proper distribution of income.

The Planning Commission, which is an agency of the government,

plays a vital role in it. Some of the important questions like nationalization,

privatization and prohibition are all economic as well as political questions.

Elections are fought often in many countries on economic issues.

Unemployment, labour disputes are all economic issues. But government

has to tackle them. The relationship between economics and politics is so

great that the early economists described economics as political economy.

Sometimes, political ideas and institutions are influenced by economic

conditions. For example, socialism was born of economic inequalities and

exploitation in England during the industrial revolution. Karl Marx is

considered as the Father of (scientific) socialism.

Economics and History

 Economics and history are closely related. History is a record of the

past events. In history, we survey economic, political and social conditions

of the people in the past. To a student of history, love affairs, marriages and

even murders of kings are important subjects of study. For example, the

murder of Julius Caesar is important for a student of Roman history. In our

country, the religious policy of Mughal emperors is important for a student

of history. But we are interested in history only to the extent that it will

help us in understanding economic problems of the past.

As students of economics, we are interested in things like taxation and

other sources of revenue and standard of living in the past.

In economics, we make use of historical data to formulate economic

laws. We make use of history in economics to study the material conditions

of people in the past. There is a separate branch of economics known as

'Economic History'.

We may say economics is the fruit of history and history in the root of

economics:

'Economics without history has no root; History

without economics has no fruit'.

Economics and Ethics

Ethics is a social science. It deals with moral questions. It discusses the

rules that govern right conduct and morality. It deals with questions of

right and wrong. It aims at promoting good life.

There is connection between economics and ethics. While economics,

according to Marshall, aims at promoting material welfare, ethics aims at

promoting moral welfare. When we discuss economic problems, often we

consider ethical issues. The government introduced prohibition in many

states for ethical reasons, though there was heavy loss of revenue to it.

But Lionel Robbins strongly believes that an economist as an

economist should not consider ethical aspects of economic problems. But

many economists do not agree with him. They believe that economics

cannot be dissociated from ethics. Even Marshall considered economics as

a handmaid of ethics. He looked at economics as a study of means to better

the conditions of human life.

Economics and Jurisprudence

Jurisprudence is the science of law. The economic progress of a nation

depends to a great extent on its legal system. Good laws promote economic

progress and bad laws act as an impediment to growth. For example, in the

past when we welcomed foreigners to invest in our country, they used to

say our taxation was complex and not good. Of course, now things have

improved. So we must have simple and clear laws in the fields of taxation

and labour legislation to promote economic progress.

Economics and psychology

Psychology is the science of mind. It deals with all kinds of human

behaviour. For example, we have child psychology, mob psychology,

industrial psychology and criminal psychology. But economics studies one

aspect of human behaviour. It studies human behaviour with reference to

unlimited wants and limited means. Of late, psychology has become

important in analyzing economic problems. To deal with labour problems,

we must understand industrial psychology. And a good businessman must

understand the psychology of buyers whenever he wants to change the

price of his good. Many important laws of economics are based on

psychology. For example, we have the law of diminishing marginal utility.

It tells that the more and more of a thing you have, the less and less you

want it.

Economics, mathematics and statistics

Among other sciences, economics is related to mathematics and

statistics. Statistics is the science of averages. It is the science of counting.

Many tables and diagrams used in economics are based on statistical

analysis. Mathematical methods are largely used in modern economics.

Now we have a new science called econometrics. It makes use of

statistics and mathematics in economics. The econometric society was

founded in 1930, and the first Nobel prize in economics was awarded to

Jan Tinberen and Ragnar Frisch for their contribution to econometrics.

Static and dynamic concepts

Time element is very useful in studying the working of an economy. There

are two main lines of approach. They are 1. static analysis and 2. dynamic

analysis. In the case of static analysis, we examine a problem at any given

moment of time. Even in static analysis, sometimes we consider a short

period rather than a single point. We assume that some changes take place

during the short period. The method of approach where we take note of

changes in the short period is known as comparative statics. For example,

in comparative statics, we compare the state of economy at one moment to

the state of the economy at another moment. Marshall's analysis of supply

and demand is a good example of comparative statics.

In dynamic analysis, we examine the path or process by which the

economy moves from one state of equilibrium to another. Time element is

an important factor is dynamic analysis. Change is the key word in

dynamic analysis. For example, investment during a period may depend

upon the rate of interest in the previous period. The study of the trade cycle

may be given as a good example of dynamic analysis.

Stocks and flows

Stocks and flows are basic concepts in economics. Stocks can be

measured at a given point of time. A flow is a quantity that can be

measured only in terms of a specified period of time. In other words, it has

a time dimension. For example, wealth is a stock and income is a flow.

Micro economics and macro economics

Economic theory can be broadly divided into micro

economics and macroeconomics. The term micro means small

and macromeans large.

In microeconomics, we deal with problems such as the output of a

single firm or industry, price of a single commodity and spending on goods

by a single household.

Macroeconomics studies the economic system as a whole. In it, we get a

complete picture of the working of the economy. It is a study of the

relations between broad economic aggregates such as total employment,

saving and investment. We may also say that macro economics is the

theory of income, employment, prices and money. That is why

macroeconomics is sometimes studied under the title 'Income and

Employment Analysis'.

Economics as a science
 We no longer ask the question whether economics is a science or an art.

Science is a systematized body of knowledge. Just as physics and

chemistry are sciences, economics is also a science. We observe facts,

conduct experiments and make generalizations in physics and chemistry

after testing the results. The same scientific methods are followed in

economics also. Economics, like all other sciences, studies the relationship

between cause and effect.

Sciences may be broadly divided into physical sciences and social

sciences. Physics and chemistry are examples of physical sciences.

Economics is a social science. It studies about a particular aspect of human

behaviour. And human behaviour is full of complexity. It is not easy to

study it. So economic science is not as precise and exact as the physical

sciences.

But economics has a greater right to be considered as a science than

other social sciences like politics or history because in economics we make

use of money as a measuring rod of utility. It is true that it is only a rough

measure but still it enables us to give concrete shape to the laws of

economics. Sometimes, what we say in economics may not come true in

real life. But this is the case with many other sciences. For example, we

joke about weather forecasts. The weather report in the newspaper may say

that there will be heavy rainfall on a particular day. But there might not be

any rain at all on that particular day. On account of that, we cannot say that

meteorology (the science of weather) is not a science. Similarly, if some

economic laws do not come true, we cannot say that economics is not a

science.