If we talk about Economics as a matter of subject only, we find it is a very dynamic subject and it is also continuously growing. When we talk about the scope of economics, means we are supposed to uncover its definition of economics, whether it is an art or a science, and whether it is a positive or normative science.
Economics is an Art or Science?
It has been always part of the profound debate and discussion about whether economics is art or science. But ultimately there is no watertight conclusion that can be drawn on any judgment or categorization on the basis of the following arguments:
Economics as an Art :
- Economics can be considered as an art because art includes the manifestation or execution of a variety of theories into practical forms.
- When economics deals with the practical aspects of the life of human beings like unemployment, poverty, inflation, distribution of resources etc, to ensure maximum welfare of the people, it comes under the category of art because here it does not follow a single scientific method to the execute any process because the set of inputs involves a variety of methods and, at the same time when we look at the problems in an economy, they are also not the result of any single cause or factor but because of the set of varying factors and reasons, and no constant cause-effects factor always prevails.
- Also, economics uses assumptions so that situations for the execution of theories, laws and relationships between economic variables can be well defined.
Economics as Science :
- Since science can be defined as a systematic, organized, and logical body of knowledge in which economic facts are studied and analyzed.
- According to this analogy, economics just like science is also based upon certain laws and theories e.g., the law of demand, the law of diminishing marginal utility, and theories of inflation that are based upon cause-effect phenomena.
- Economics also provides an interpretation of economic activities as accurate and appropriate and since economics explains it comprehensively, it also has the ability to forecast economic events.
- Although economics uses scientific methods for analysis and observation of data and inputs provided, sometimes they are not as accurate as expected. For example, a fall in price may not lead to an increment in demand but rather may decrease demand because people can have apprehension of low quality of the goods/service.
- But these exceptional phenomena not always lead to the conclusion that economics is not a science. It can be, instead, categorized as a social science because such activities are associated with people whose actions are so filled with uncertainty.
Economics is an art and science both :
- It can be inferred from the above arguments that economics is an art as well as a science. Economics deals with both the domain of study, i.e., first the theoretical domains, which use a scientific method for solutions, and second the practical domains, which use behavioral and practical methods that are manifestations of art.
- Thus, it can be concluded that theoretical economics is science while practical economics is an art and in the same way, an economist can also have two statuses like a scientist – a scientist and a philosopher.
Economics as a Positive and Normative Science?
According to J.N Keynes,
- Positive science is a domain of science that seeks for what it is with the clear objective to establish scientific laws and theories while normative science deals with what ought to be, with the aim to determine the set of ideals and standards.
According to Robbins,
- Economics as a positive science rules out the moral or ethical aspect of human life rather it is more to seek what is not ought to be and it represents and describes facts without looking into the question of its ethical or moral validity. For example, Growth in the economy leads to an overall increase in GDP while it does not solve the issue of the income gap between rich and poor.
- Normative economics revolves around value judgment means being concerned with the question of what ought to be. It looks into the question of good and bad depending on the ethics and beliefs of the people rather than on scientific laws and principles. For example, positive economics is concerned with how poverty/unemployment should be measured while normative economics is concerned with what should be the poverty line and/or repercussions of unemployment.
Thus, we can arrive at a conclusion on the basis of the above arguments that Economics is both a positive and normative science as it deals with both, the fact as well the nature of the fact and its immediate as well as future impact on people.