What is the economy

Definition of economics

Most of the sciences that man has known from ancient times until the present time are concerned with arriving at solutions or explanations that clarify issues or address specific problems. Economics, as a science, has been concerned with searching for the relationships that bring together humans, their desires and needs, and the ways, resources and means that provide them, and from here it appeared. The importance of economics and its main subject, which was keen to study these relationships, which turned into an economic problem over time; Because of the infiniteness of human needs and the limited or scarce means or resources for them.

Economics is the study of scarce resources and their role in fulfilling needs. Economics is also defined as the search for the appropriate way or method to benefit from and exploit resources, according to the pattern that suits societies and their needs. Economics is keen to find the best suitable alternatives for treating scarce resources, and seeks to explain economic phenomena. Predicting events affecting the future of the economy.

Theories of economic thinkers

Economics includes several theories that constitute means or tools that help explain and study economic phenomena, formulate appropriate solutions to them, and prepare a set of future expectations based on the data of each economic theory. The divergence of opinions of economic thinkers has led to the emergence of clear agreement and disagreement among them regarding the various economic theories, and the following is Information about economic theories according to the opinions and ideas of the most important economic scholars and thinkers:

Adam Smith's theory

In his study of economics, Adam Smith relied on the philosophy that was concerned with studying human societies, and Smith was able to reach a theoretical conclusion indicating that people act based on their interests. Therefore, they have the ability to produce services and products that are important to them as a single society. That is, in the form of one group, and he called this intellectual conclusion the invisible hand, and Smith explained his theory by presenting examples about various industries and professions. The baker makes an amount of bread that he deems appropriate for his production, and each individual in society gets the amount that suffices his needs and the needs of his family. of bread, and this is how all other industries work, and these ideas were later known as the market economic system.

Karl Marx's theory

Karl Marx's theory differed from Adam Smith's theory. Marx saw that the capitalist ideas expressed by Smith were unstable, and that the profits made by factory production resulted from their exploitation of workers. He pointed out the existence of a class struggle resulting from capitalism. Karl Marx predicted the collapse of capitalism and the interest of societies in communist socialism. Which represents his economic thought; That is, workers owning the means of production, and Marx’s ideas were known as the socialist economy, but Marx’s intellectual theories did not succeed. As a result of two reasons:

• The socialist economy had little efficiency in producing products.
• The average income of workers has increased over time; Which contradicts Marx's theory about factories exploiting their workers in order to achieve profits.

John Keynes's theory

The scientist and economic thinker John Keynes was interested in following up on Smith's capitalist theory and ideas, and he was able to conclude a set of theories that did not agree with Marx's views. Keynes was interested in studying the impact of governments on capitalism, and during the period of Keynes’ study the impact of the Great Depression on the economy was clear, so he saw that the only way out of this situation was for governments to seek cooperation with the private sector. By providing him with the money necessary to support the demand for services and goods, and over time, Keynes's ideas turned into an economic system known as Keynesian economics.

Economic systems

Since the spread of production in human life, many economic systems have emerged, and these systems have been applied based on the nature of social life prevailing in every human society. Which led to the development of the history of economics in the lives of peoples, and the following is information about some of the most important economic systems:

• Primitive communal system: It is the first economic system to appear in human history. Where humans relied on primitive tools in production, and work and professional expertise were limited, people relied on working in groups to adapt to nature, and they lived together within tribes relying on traditions, and production was distributed equally among individuals.
• Slavery system: It is also known as the slavery system, and it appeared after the primitive communal system, and relied on individuals exploiting each other, and the emergence of class differences, so work became limited to individual slaves. Which led to the emergence of the term slave society, which was divided into two categories: slaves and masters.
• Feudal system: It is the system that replaced the slavery system, and depends on the presence of property and production tools that represent the lands in the hands of individual feudal peasants who exploit individual peasants. The feudal system includes the spread of feudal property in the lands of villages and cities. Which enhances the exploitation of the feudal lords of the population living on these lands.
• Capitalist system: It is a modern economic system compared to the previous two systems, and it is concerned with achieving profits and enhancing trade exchange. The means and tools of production are owned by a specific group of individuals called capitalists. As for the individuals who constitute the large segment of society, they are the workforce that works in the capitalists’ means of production.
• Socialist system: It is the economic system that depends on society’s ownership of all productive means and tools. That is, enhancing the existence of collective ownership. This economic system seeks to provide all the needs of individuals, but it leads to a noticeable discrepancy between wealth and the average individual income. As a result of the variation in the quality and volume of work.

economical development

Economic development is considered one of the most important factors and elements influencing the economy. It includes all means that contribute to changing the economic structure, which leads to the transfer of the national economic situation in a particular country from a decrease in production efficiency to a development in production levels, during a state of balance in relations between production sectors.