The Meaning and History of Economics: From Hunting to Modern Industry
Economics has become one of the most vital fields of study in today’s world. We often hear the term in daily conversations—economic crisis, economic growth, low-income households, and so on. But how much do we really know about the origins and meaning of economics?
A Brief History of Economics
Compared to other fields like mathematics or philosophy, economics is considered a relatively young science. Although economic problems have existed for thousands of years, economics only gained recognition as a formal science once it fulfilled three essential criteria: a clear subject of study, a scientific method, and universal applicability.
In ancient times, humans didn’t face complex economic issues. They simply picked fruit for food, drank clean water from rivers, and slept using leaves and wood for shelter. However, as the human population grew and natural resources became scarcer, problems began to arise. People had to hunt, fish, and eventually started raising animals and cultivating crops to meet their needs.
As civilization progressed, so did human ingenuity—leading to the development of crafts, industries, and eventually global trade. This journey shows how economic activity evolved from basic survival into a complex system of exchange and production.
Friedrich List, a German economist, outlined five key stages in the development of economic systems:
- Hunting and fishing
- Animal husbandry
- Agriculture
- Local agriculture and craftsmanship
- Agriculture, industry, and international trade
Another key figure in economic history is Aristotle (384–322 BC), a Greek philosopher and student of Plato. In his works Politics and Nicomachean Ethics, Aristotle explored early concepts of value, exchange, money, division of labor, and interest rates. Some of his theories, such as the theory of value, remain relevant even today.
However, the formal birth of economics as a standalone discipline came in 1776, with the publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith. This book introduced foundational ideas such as the “invisible hand”—a metaphor for the self-regulating nature of markets—alongside other important concepts like absolute advantage.
What Is Economics?
The word economics comes from the Greek oikos (household) and nomos (rule or management), meaning “household management.”
According to the Indonesian Dictionary, economics is the study of the principles of production, distribution, and consumption of goods and wealth.
Several experts have provided more detailed definitions:
- Mubyarto, an Indonesian economist, defined economics as a social science dedicated to the advancement of humanity.
- Paul Samuelson, Nobel laureate, described economics as the study of how people make choices—whether using money or not—regarding scarce resources that can be used in various ways for present or future needs.
- Albert L. Meyers emphasized economics as the study of human needs and the efforts to fulfill them through goods and services, which are varied and virtually unlimited.
- J.L. Meij explained economics as the study of human efforts toward prosperity, viewing humans as homo economicus, driven by the pursuit of well-being.
Conclusion
From these definitions, we can conclude that economics is the science that studies human efforts to fulfill increasingly complex needs using limited resources as effectively as possible.
The historical evolution of economic thought—from primitive survival to international trade—proves that economics is a dynamic, ever-evolving discipline. Whether through Aristotle’s timeless theories or Adam Smith’s market principles, economics continues to shape how we understand and navigate the world around us.
