History of economics

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ART OR SCIENCE?

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Для самостоятельной работы студентов I курса

Like most things in our modern, changing world, the function of management is becoming more complex. The role of a manager today is much different from what it was one hundred years, fifty years or even twenty-five years ago. At the turn of the century, for example, the business manager’s objective was to keep his company running and to make a profit. Most firms were production oriented. Few constraints affected management’s decisions. Governmental agencies imposed little regulations on business. The modern manager must now consider the environment in which the organization operates and be prepared to adopt a wider prospective. That is, the manager must have a good understanding of management principles, an appreciation of the current issues and broader objectives of the total economic political, social, and ecological system in which we live, and he must possess the ability to analyze complex problems.

The modern manager must be sensitive, and responsive to the environment - that is he should recognize and be able to evaluate the needs of the total context in which his business functions, and he should act in accord with his understanding.

Modern management must possess the ability to interact in an evermore-complex environment and to make decisions. A major part of the manager’s job will be to predict what the environment needs and what changes will occur in the future.

Organizations exist to combine human efforts in order to achieve certain goals. Management is the process by which these human efforts are combined with each other and with material resources. Management encompasses both science and art. In designing and constructing plans and products, management must draw on technology and physical science, of course, and, the behavioral sciences also can contribute to management. In handling people and managing organizations it is necessary to draw on intuition and subjective judgment. But although the artistic side of management may be declining in its proportion of the whole process it will remain central and critical portion of your future jobs. In short:

- Knowledge (science) without skill (art), or dangerous;

- Skill (art) without knowledge (science) means stagnancy and inability to pass on learning;

In the 1500s there were few universities. Those that existed taught religion, Latin, Greek, Philosophy, history and mathematics. No economics. Then came the enlightenment (about 1700) in which reasoning replaced God as the explanation of why things were the way they were. Pre-Enlightenment thinkers would answer the question, “Why am I poor?” with, “Because God wills it”. Enlightenment scholars looked for a different explanation. “Because of the nature of land ownership” is one answer the found.

The amount of information expanded so rapidly that it had to be divided or categorized for an individual to have hope of knowing a subject. Soon philosophy

Was subdivided into science and philosophy. In the 1700s, the sciences were split into natural sciences and social sciences. The late 1800s and early 1900s social science itself split into subdivisions: economics, political science, history, geography, sociology, anthropology, and psychology. Many of the insights about how the economic system worked were codified in Adam Smith’s The wealth of Nations, written in 1776.

Throughout the 18^th and 19^th centuries economists such as Adam Smith, Thomas Malthus, John Stuart Mill, David Ricardo, and Karl Marx were more than economists; they were social philosophers who covered all aspects of social science. These writers were subsequently called Classical economists. Alfred Marshall continued in that classical tradition, and his book, Principles of Economics, published in the late 1800s, was written with the other social sciences in evidence. But Marshall focused on the questions that could be asked in a graphical supply-demand framework.In doing so he began what is called neo-classical economics.

Afterwards Marshal’s analysis was downplayed, and the work of more formal economists of the 1800s (such as Leon Warlas, Francis Edgeworth, and Antoine Cournot) was seen as the basis of the science of economics. Economic analysis that focuses only on formal interrelationships is called Walrasian economics….

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