An economy (from Greek οίκος – “household” and νέμoμαι – “manage”) is an area of the production, distribution, or trade, and consumption of goods and services by different agents.
Understood in its broadest sense, ‘The economy is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of resources’. Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency. However, monetary transactions only account for a small part of the economic domain.
Economic activity is spurred by production which uses natural resources, labor, and capital. It has changed over time due to technology (automation, accelerator of process, reduction of cost functions), innovation (new products, services, processes, expanding markets, diversification of markets, niche markets, increases revenue functions) such as, that which produces intellectual property and changes in industrial relations (for example, child labor being replaced in some parts of the world with universal access to education).
A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of human practices and transactions. It does not stand alone.
A market-based economy is one where goods and services are produced and exchanged according to demand and supply between participants (economic agents) by barter or a medium of exchange with a creditor debit value accepted within the network, such as a unit of currency.
A command-based economy is one where political agents directly control what is produced and how it is sold and distributed.
A green economy is low-carbon, resource efficient, and socially inclusive. In a green economy, growth in income and employment are driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services
The first recorded sense of the word “economy” is in the phrase “the management of œconomic affairs”, found in a work possibly composed in a monastery in 1440. “Economy” is later recorded in more general senses, including “thrift” and “administration”.
The most frequently used current sense, denoting “the economic system of a country or an area”, seems not to have developed until the 1650s
As long as someone has been making, supplying and distributing goods or services, there has been some sort of economy; economies grew larger as societies grew and became more complex. Sumer developed a large-scale economy based on commodity money, while the Babylonians and their neighboring city states later developed the earliest system of economics as we think of, in terms of rules/laws on debt, legal contracts and law codes relating to business practices, and private property.
The Babylonians and their city state neighbors developed forms of economics comparable to currently used civil society (law) concepts. They developed the first known codified legal and administrative systems, complete with courts, jails, and government records.
The ancient economy was mainly based on subsistence farming. The Shekel referred to an ancient unit of weight and currency. The first usage of the term came from Mesopotamia circa 3000 BC., and referred to a specific mass of barley which related other values in a metric such as silver, bronze, copper etc. A barley/shekel was originally both a unit of currency and a unit of weight, just as the British Pound was originally a unit denominating a one-pound mass of silver.
For most people, the exchange of goods occurred through social relationships. There were also traders who bartered in the marketplaces. In Ancient Greece, where the present English word ‘economy’ originated, many people were bond slaves of the freeholders.The economic discussion was driven by scarcity.
In Medieval times, what we now call economy was not far from the subsistence level. Most exchange occurred within social groups. On top of this, the great conquerors raised venture capital (from ventura, ital.; risk) to finance their captures. The capital should be refunded by the goods they would bring up in the New World. Merchants such as Jakob Fugger (1459–1525) and Giovanni di Bicci de’ Medici (1360–1428) founded the first banks.The discoveries of Marco Polo (1254–1324), Christopher Columbus (1451–1506) and Vasco da Gama (1469–1524) led to a first global economy. The first enterprises were trading establishments. In 1513, the first stock exchange was founded in Antwerpen. Economy at the time meant primarily trade.
The first economist in the true modern meaning of the word was the Scotsman Adam Smith (1723–1790) who was inspired partly by the ideas of physiocracy, a reaction to mercantilism and also later Economics student, Adam Mari. He defined the elements of a national economy: products are offered at a natural price generated by the use of competition – supply and demand – and the division of labor. He maintained that the basic motive for free trade is human self-interest. The so-called self-interest hypothesis became the anthropological basis for economics. Thomas Malthus (1766–1834) transferred the idea of supply and demand to the problem of overpopulation.
The contemporary concept of “the economy” wasn’t popularly known until the American Great Depression in the 1930s.
After the chaos of two World Wars and the devastating Great Depression, policymakers searched for new ways of controlling the course of the economy. This was explored and discussed by Friedrich August von Hayek (1899–1992) and Milton Friedman (1912–2006) who pleaded for a global free trade and are supposed to be the fathers of the so-called neoliberalism. However, the prevailing view was that held by John Maynard Keynes (1883–1946), who argued for a stronger control of the markets by the state. The theory that the state can alleviate economic problems and instigate economic growth through state manipulation of aggregate demand is called Keynesianism in his honor. In the late 1950s, the economic growth in America and Europe—often called Wirtschaftswunder (ger: economic miracle) —brought up a new form of economy: mass consumption economy. In 1958, John Kenneth Galbraith (1908–2006) was the first to speak of an affluent society. In most of the countries the economic system is called a social market economy.
adding page this day:
you’re saying quit trying to org society based on econ system it’s something else
‘even very idea of econ only existed last few 100 yrs..that there’s a separate sphere where people exchange stuff..relatively new.. most people in history would never have imagined’ @davidgraeber https://t.co/xbLpWYGnXD
Original Tweet: https://twitter.com/monk51295/status/1036608822112993287
‘just like they never would have imagined you could sell people your time.. the idea of wage labor is as bizarre & exotic from the perspective of most people who ever lived’ @davidgraeber
Original Tweet: https://twitter.com/monk51295/status/103660902292785152
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