Origin and Development of Economics

Origin and Development of Economics

The term economics was derived from the Greek word 'Oikonomikos' which means the one who manages the household. So, economics is referred to as the management of households with limited income. The concept of economics was brought by Plato and Aristotle in 400 BC for the first time in history. In the same period, and Indian politician, philosopher, and economist "Kautilya" has also given the ideas of economics in his book "Arthasastra" relating to wealth, trade, public finance, and taxes, etc. However, the comprehensive and systematic form of the concept of economics was brought forward by Adam Smith with his publication of "An inquiry into the nature and causes of the Wealth of Nations" in 1776 A.D after which economics became a separate discipline in social science. So, Adam Smith is known as the father of Economics.

The development of economics as a separate part of knowledge has a history of around 245 years. This period of 245 years can be classified into three types, which are as follows:

1. Classical period (1776-1890): The classical period is the period in the history of economic thought dominated by the economists like Adam Smith, T.R. Malthus, David Ricardo, J.S. Mill, J.B. Say, etc. The starting point of the classical period is generally regarded as 1776 AD because Adam Smith's 'Wealth of Nations' was published this year. Hundred and fourteen years of time in the history of economic thought, ie. from 1776 A.D. to 1890 A.D. is regarded as the classical period. The pioneer of the classical school of economic thought is Adam Smith. Adam Smith and his followers are known as the classical economists and their school of economic thought is known as the classical school of economic thought.

2. Neo-classical period (1890-1932): The neoclassical period is the history of economics thought dominated by economists, such as Alfred Marshall, A.C. Pigou, Irving Fisher, Carl Menger, Edwin Cannan, Knut Wicksell, etc. The starting point of the neo-classical period is generally regarded as 1890 because Alfred Marshall's ‘Principles of Economics’ was published this year. The leader of neo-classical economic thought is Alfred Marshall. Alfred Marshall and his followers are known as the neo-classical economists and their school of economic thought is known as the neoclassical school of economic thought. The neo-classical economists revised the classical concepts, theories, and laws of economics.

3. Modern period (1932 onwards): The period of 1932 onwards in the history of economic thought is generally regarded as the modern period. Economic theories, concepts, and laws fully developed in this period. The leading economists of the modern period are Lionel Robbins, J.M. Keynes, P.A. Samuelson, etc. The focus of economics from material welfare of Alfred Marshall shifted to scarcity and choice of Lionel Robbins in this period.