What Economics Means to Me
by Garth Heutel
Physics is the science that explains what particles and matter do. Astronomy is the science that explains what planets and stars do. Biology is the science that explains what living creatures and their components do. And economics is the science that explains what people do. Like the other sciences, economics combines mathematical theory with rigorous analysis of observable data. Also like the other sciences, as theory develops and as the amount and quality of available data increases, economics can make more accurate predictions about a wider range of human behavior.
The purpose behind economics is to make people's lives better. By explaining and predicting how people act under various circumstances, we can enact policy and create institutions to foster economic growth and solve social problems more efficiently. The ways in which people respond to incentives can be complex and even counter-intuitive, making the application of economics to the real world difficult. Questions such as the optimal way to reform Social Security or the appropriate method to deal with the potential risks of global warming do not have easy answers. But a lot depends on finding the right answers. Economists who are working on solving these and other problems do so because they realize the importance of their work, and they desire to make a positive contribution to our understanding of ourselves.