IMPORTANCE OF ECONOMICS


In the words of Malthus,

“Political economy is perhaps the only science of which it may be said that the ignorance of it is not merely a deviation of good but produces great positive evil.”

Durbin says that:

“Economics is the intellectual religion of the day.”

Sir Henry Clay remarks that:

“The study of Economics is a practical necessity and a normal obligation.”

All it reflects that Economics has prime importance in social sciences. It can be discussed under two heads:

i. Theoretical importance ii. Practical importance

THEORATICAL IMPORTANCE


1. Intellectual development

The study of Economics widens the mental horizon of the people because it increases mental capacity to understand various problems of life.

2. Spirit of co-operation

The study of Economics realizes us that we are interdependent to meet our economic and social wants. It leads to spirit of co-operation.

3. Critical analysis

An economist critically analyses the situation and then draws conclusions which provides a guide - line for successful life.

4. Rationality

The study of Economics teaches rationality, i.e. to avail the best possible situation within the given conditions.

5. Sense of responsibility

Economics teaches us that we have to meet our unlimited wants with limited resources. It creates a sense of responsibility which in turn makes a person a better citizen.

6. Vision about economic system

The study of Economics not only enables to understand different economic systems, i.e. capitalism, socialism, Islamic economic system but it also creates a vision to look into the working of a particular economic system.

7. Source of unavoidable information

To understand some problems like inflation, exchange rate, shares, BOP, deficit financing etc. has become unavoidable for a successful life. Economics is the major source of all these inevitable information.

PRACTICAL IMPORTANCE


1. To understand other subjects

The study of Economics is very useful to understand other subjects like history, sociology, psychology etc.

2. Solution of economic problems

The study of Economics provides the solution of critical economic problems like poverty, inflation, monopolies, unemployment, environmental pollution etc.

3. Government

Planning and development strategies, budget, monetary policy, fiscal policy etc. are major concerns of the government. Government depends heavily upon economists for policy decision - making.

4. Producers

The ultimate objective of a producer is to maximize profit in case of profit and minimize loss in case of loss. It is the study of Economics which provides guideline to hit the target.

5. Consumers

Consumers are always in search of maximization of satisfactions. It is Economics which provides basic principles to maximize satisfaction.

6. Bankers

Banking is the most challenging art of present era. A successful banking system is based on the knowledge of Economics.

7. Speculators

Speculation, i.e. purchase and sale of shares, bonds, certificates etc. is the major feature of present business world. It is Economics which provides outlines for speculation.

8. Rulers

Economic tactics are the most effective tactics to win the favour of masses. Hence it is must for a successful ruler to have the awareness of at least basic knowledge of Economics.

9. Labour

Labourer enriched with the knowledge of Economics can realize their role and importance to the employer in production process. Hence Economics enables them to enjoy higher wages.

10. Citizen

Knowledge of Economics is indispensable for a good citizen. Wooten has rightly remarked that:
“You cannot be a citizen in real sense unless you are at least in some degree an economist.”
Reading: National Income

11. Global supremacy

Global supremacy is possible only on the basis of advanced studies in Economics. For instance G-8 countries are enjoying global supremacy on the basis of literature of Economics.

12. Optimum allocation of resources

Optimum allocation of resources is key to economic development and the study of Economics confirms best allocation of resources.

13. Equitable distribution of wealth

Inequitable distribution of wealth has been the crucial problem of especially LDC’s. It is the study of the Economics which provides guide - line for equitable distribution of wealth.

14. Gate-way to economic development

Economic development has been the dream of all nations. It is the knowledge of Economics which serves as a gate-way to economics development.

CONCLUSION

The above – mentioned facts reveal that human welfare is the direct and primary concern of Economics. Hence Economics is an extremely important and useful subject for all times and for all the nations.


In the words of Prof. Shabbir Ahmed Gondal,

“A nation’s fortune is determined not in battle-field but in economic field; and it is the study of Economics which ensures supremacy in economic field.”

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