What is Economics?

This was a tough topic because the concepts and ideas of economics are so varied and broad. So I have done what I can to communicate what economics is as best as I can.

Economics is so much more than Mathematics, Stock Markets, and Finance.

Economics Is

The endeavor that explains the logical implications of purposeful human action taken to remove felt uneasiness, under the constraint of scarcity. (note here that i preference the term endeavor, rather than science. This is because the fundamentals of economics are not observed but known, innately) 

Economics Explains

The laws of human action that govern society, prosperity, and peaceful cooperation. In this regard, economics is not merely an academic subject—it is a tool for understanding how human beings survive, coordinate, and thrive in a world of scarcity.

Economics Does

It helps direct and inform human action and organization to best utilize the available limited resources for the best satisfaction of wants. 

The study of economics is part of a larger study of Human Action. 

When people use the term Economics today they usually are referring to what is also called Catallactics (i.e. the study of free market exchange, focusing on how prices and exchange ratios emerge from the voluntary actions of individuals.) as part of the larger study of Praxeology, the study of purposeful human action. 

The most important part of economics is understanding that the economy is not a machine, it is more like an ecosystem. Economists are unable to operate or command it. The best we can do is to prevent distortions that prevent markets from coordinating human action. This is one of the most significant roles Economics knowledge can contribute to a prosperous society, The knowledge to limit power.

Understanding this allows one a correct framework to interpret real world action and market phenomena. 

It all starts with Action. (Intentional choice and conscious effort.) 

human beings act—they choose among alternatives in order to remove felt uneasiness and improve their well-being. From this foundational insight, Austrian economists derive a rich and coherent body of theory that explains value, price formation, money, interest, entrepreneurship, business cycles, and social cooperation.

The economy is not a machine to be engineered or a set of curves to be manipulated, but a dynamic, evolving process created by the choices of millions of individuals—each with unique knowledge, goals, and circumstances.

The study of economics has three primary pillars: 

Actions are Individual:

This can not be stressed enough. All action is done by individuals. Groups never act but as individuals.. Societies don’t act, groups don't act. Individuals act. 

Value is subjective:

Value does not exist in goods or services themselves; it arises from how individuals rank their wants. A diamond is not valuable because of its physical properties, but because people believe it will satisfy their desires more than a lump of coal. This “marginal,” subjective valuation explains why prices evolve the way they do and why market exchange is mutually beneficial.

Market Processes: 

By our nature, people develop markets as groups form, understanding markets is a key economic and anthropological requirement. The economy is not a static equilibrium but a process of discovery. Entrepreneurs constantly interpret price signals, coordinate production, and anticipate consumer needs. Through profit and loss, markets reward accurate foresight and penalize error. This continual adjustment creates social order without central direction. 

Markets themselves are only possible because of private ownership, starting with one’s person and extending outwards with their labor.

This is a simple outline of what Economics is. I will be elaborating on and using economic thought and lenses to examine a variety of historical and contemporary topics.

I want to provide sources that I have used in collecting and learning about economics. Please see the following for further reading:

Hayek, Friedrich A. von. Monetary Theory and the Trade Cycle. Translated by N. Kaldor and H. Croome. New York: Augustus M. Kelley, 1966 (Reprint of 1933 English ed.

Menger, Carl. Principles of Economics: First, General Part. Translated by James Dingwall and Bert F. Hoselitz. Glencoe, Ill.: The Free Press, 1950. Originally published as Grundsätze der Volkswirthschaftslehre (Wien: Wilhelm Braumüller, 1871

Rothbard, Murray N. Economic Thought Before Adam Smith: An Austrian Perspective on the History of Economic Thought, Volume I. Brookfield, VT: Edward Elgar Publishing, 1995.

Von Mises, Ludwig. Human Action: A Treatise on Economics, The Scholar's Edition. Auburn, AL: Ludwig von Mises Institute, 1998

Von Mises, Ludwig The Theory of Money and Credit. Translated by H. E. Batson. New Haven: Yale University Press 1953.