Mises Wire

Textbook Definitions of Economics: An Informal Survey

Stack of books

As soon as I was publicly listed as an instructor for a large principles-level economics course for the Spring semester, textbook companies and their sales representatives circled and descended on me like a pack of Mises University students on Walter Block’s trail.

I’ve only taught smaller sections so far, so I had encountered textbook reps before, but not on the scale of “let me send multiple copies of all the economics textbooks we offer to your house, along with their respective instructor resources.” Stacked together, my collection could double as a small end table.

The deluge of textbooks has given me an opportunity to informally survey what comprises “textbook economics” these days. The fundamental divide between good economics and the mainstream is apparent on the first page of most of these textbooks, in which the authors simply define economics.1 Notice these that imply large groups of people can make choices:

Economics is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices.

Economics is the study of how society manages its scarce resources.

Some can’t even describe economics as a coherent, stand-alone discipline—economics is a set of fraternal twins: micro and macro. These texts didn’t have a singular definition of economics.

Microeconomics deals with decision making by individuals, business firms, industries, and governments. […] Macroeconomics, on the other hand, focuses on the broader issues we face as a nation. […] Economics is a social science that uses many facts and figures to develop and express ideas.

Macroeconomics is the study of collections of people and firms and how their interactions through markets determine the overall economic activity in a country or region. The other main area of economics, microeconomics, focuses on the study of individual people, firms, or markets.

Others get closer to a good definition, with a more appropriate outline of the scope of economics, but still have some minor problems:

Economics is the study of how people allocate their limited resources to satisfy their nearly unlimited wants.

Wants aren’t nearly unlimited, but unlimited. In fact, “nearly unlimited” is an oxymoron, like “almost infinite”.

An economic agent is an individual or a group that makes choices. […] Economics is the study of how agents choose to allocate scarce resources and how those choices affect society.

Preferences reside in the mind of an individual. As such, groups of people don’t make choices in the economic sense.

I was more satisfied with these two, but I may be giving them the benefit of the doubt that by “people”, they mean it in the individual sense, not the collective:

Economics is the study of the choices people make to attain their goals, given their scarce resources.

Economics is the study of how people allocate their limited resources to satisfy their unlimited wants.

All of these books try to connect the concepts presented in each chapter to current events or goods familiar to undergraduates like smartphones or Facebook. Unfortunately, many of the first examples offered along with the first chapter on the scope and definition of economics involved some government intervention. Government action was portrayed as a viable option to solve some economic problem or as a permanent, unquestioned fixture for the environment in which mechanical citizen-agents “do” economics.

For those who understand that economics is the science of purposeful individual action in an attempt to satisfy an unlimited number of wants with a limited set of means, such a fixture should stand out like a stack of textbooks pretending to be an end table.

  • 1The textbooks quoted here are from these authors, in order: Parkin; Mankiw; Stone; Jones; Mateer and Coppock; Acemoglu, Laibson, and List; Hubbard and O’Brien; and Miller.
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