The economy investigates by stipulating the principles and laws of use, which are aimed at putting resources, means of production, financial resources, work itself, exchanges of different elements, and how human relations are carried out in the function of the existence of society.
For a long time, the economy was used as a series of rules or laws to wisely manage a home, in other words, the resources that a family, a community, or society had. This term has been refined and becomes broader over the years, wherein in the Renaissance, an attempt was made to systematize all these ideas with the great rise of trade and mercantilism. During the 19th century, Smith’s classical theory gave a new twist to the economy with its capitalist system (used today by the great nations) and its counterpart, the socialist system.
There are different stages of the economy that have been experienced in the history of humanity, so it is always very important to know everything related to it, to understand the history of humanity.
Key concepts
To facilitate the reading process on the subject “Frontiers of economic science”, some definitions that are considered important for the reader to know will be cited:
Science
“It is an ordered system of structured knowledge that studies, investigates and interprets natural, social and artificial phenomena.” (Wikipedia, 2018)
Social science
“A set of academic disciplines that study the origin and development of society, institutions, and the relationships and ideas that make up social life.” (EcuRed, 2018)
Economy
“The word economy is of very old use since it derives from the Greek terms Oikos (house) and nomos (rule), which means “government of the house” or “domestic administration”. The economy is a social science that studies the laws of production, distribution, exchange, and consumption of goods and services that man needs or wants. (Definist, 2015).
Evolution of the economy
As mentioned in the introduction to this article, to talk about the history of economics is to talk about the history of humanity: from the famous barter [1] that was carried out for many years, to the passage of a few centuries, where it has gone developing in the globalized and widely used capitalism, where there were other models which were, slave, feudal, mercantile, among others.
Each economic system is preceded by a revolution in the ideologies of societies, likewise, said the system has been the response to many shortcomings or needs of the historical episode in which it was created.
According to (BBVA, 2015) some of the most important models that have existed in the history of the economy are the following:
The first agrarian systems.
Initially, most of the activities carried out by human beings were based on agriculture, fishing, and grazing, because the concept of money as we know it today did not exist, and all economic activity was based on money. barters, so that at that time the terms of currencies, work, and organizations among others were ignored.
For many years, the main means of communication and trade between countries was through water (sea, rivers, lakes). The exchanges that were made were through the surpluses that people had of certain elements, and products made by artisans, among others. These were the main elements of subsistence economies.
With the different cultures that have been a watershed in the history of humanity, such as the Egyptian, Greek, and Roman, the slave system was the foundation of economic systems. The main source of wealth came from the work that the slaves did in agriculture. According to various Greek philosophers, war was considered a source of wealth, due to the number of slaves and the very cheap labor that was obtained by conquest.
At the time of the Roman Empire, there was a significant increase in commercial activities, although this was not very efficient when looking at it coldly, since all products and merchandise were sent to Rome, and from there, they were sent back to Rome. all the ends of the world.
The feudal system.
With the fall of the Roman Empire, an important change was derived in many aspects of societies, among them being economic activities. The idea of an empire that was protected with great walls and well-defined borders ended, and the farmers, who were the main producers of wealth, moved to the nearest fortress they had, to defend themselves against invaders and looters.
Each feudal lord defended a particular number of subjects who worked their land for him. In exchange for this protection, they gave their feudal lord and the church a previously agreed amount of what they harvested. As a curious fact, this is where the word “tithe” came from since usually, the amount that was given was a tenth of the harvest. In this historical period, commercial activity was considerably reduced, since it was only practiced in certain events where articles from handicrafts were bought or sold.
At the end of the feudal era, a new way of generating wealth began to take hold, different from everything that had been practiced since the origin of humanity (agriculture, fishing, livestock, wars) and based on the contribution of a certain value added to the goods.
It refers to all those people who practiced crafts, and who are the forerunners of factories. In this period, those who had more had to “pay” for this privilege through charitable giving, and charging interest was unacceptable.
The mercantilist system.
With the imminent passage of time, the times of hordes of people looting towns were reduced, societies dared to leave the protection of gigantic walls to grow outside, and the use of currency began for different transactions, bills of exchange, and promissory notes. . In this way, being a person of vast resources did not look bad, since if work dignifies people, the wealth that comes from it does the same. A new social class was formed among the peasants, nobility, and clergy: the bourgeoisie, clothed in trade.
With all these movements, charging interest is no longer seen as something offensive. Since it began to be understood that whoever lent a certain amount of money ran the risk that what he had lent would not be returned, and then interest was understood as a compensation for that risk. Likewise, someone who lends money to someone else can use it for something else, so that is another reason why charging interest was justified.
Capitalism and Communism.
Factories, unions of the workers who work in these, production systems, chain production, the internet itself… With the birth and growing support that capitalism had, wealth ceased to be seen as a path that was taken to reach God. and it became an end that many of us wish to possess. Generating wealth was the goal of Charles Darwin’s economic version of evolution: the most intelligent were the ones who generated the most wealth. Capitalism had its foundations in the beginning, in the erroneous idea that raw materials would never end. The falsity of this idea was made visible to all during the oil crisis in 1973. And well, it is not to justify but, when there were only 100 million inhabitants on Earth, it seemed that the previous statement was true,
Now, speaking of the opposite of capitalism (communism) in theory it worked fantastically, communism worked well on paper, but once put into practice it did not work as expected, due to an extremely important factor: the human being and his generosity to his fellow men. Everything was based on centralized planning, the hegemony of the common good and the group over the individual.
What is to come?
Although the basis of capitalism, among various elements, we cannot deny that one of them is individualism, and the “utopia” that resources will never run out, for the next economic system, should be based on the opposite of this (cooperation and recycling of resources). Since every time the days go by, it is more obvious that the resources have to end at some point, we must optimize their use and lifetime. Since the population of the world grows and grows, you could also choose to reduce the number of hours worked, but ensure that the contribution of each employee is very significant for the organization. As a simple example, one could opt for one engineer to design a product, another to improve its specifications, and a third to build it efficiently. So that,
Microeconomics.
Microeconomics is the part of the economy that deals with the analysis of the economic behavior of individual agents; In other words, it analyzes the disaggregated economic phenomena of each element (consumer, organization, among others), taking into account the decisions that each one makes to achieve certain goals of each one.
Microeconomics has several areas in which it can be developed. Some of the most important and used are the theory of the consumer, that of supply-demand, that of the producer, general equilibrium, and that of financial active markets. They cannot be considered separately since the conclusions of some have repercussions or are a percentage of the seat of others. A quick example could be that of an organization since they not only sell products and/or services but also require other products and/or services to be able to generate their own.
Macroeconomy.
Macroeconomics is the complete analysis of the economy in terms of the total amount of products and/or services generated, total income, level of employment, productive elements, and how prices behave.
Macroeconomics manages to be used in the most optimal way to influence political goals, such as making the economy itself progress, price stability, labor stability, and the process of a sustainable balance of payments.
Basic decisions of any economy.
The domain of resources that are needed to produce products and/or services that consumers need, and the cost of opportunities that arise, which traces the dilemma of choosing between different alternatives, creates the difficulty of satisfying all the needs that consumers require. , will cause the economy to choose one option and eliminate the other. From there comes the question of deciding what, how, and for whom to produce something.
The one to produce
It lies in the act of making the important decision of what will be offered to consumers, what products and/or services will be produced by the organization, and in what quantity; also taking into account how quickly those needs that consumers have are required to be solved and what are the resources that the organization has.
How to produce
In this section, it is necessary to specify who will be entrusted with organizing and preparing said production and elaboration; what methodologies will be used, and the number and type of resources that will be used to achieve said objective.
For whom to produce
This problem lies in being able to decide on how production is going to be distributed, depending on how society is distributed and for whom it will be directed, in addition to the rules established for those with special characteristics.
Apart from the three unknowns that were mentioned above, which form the basic economic problem; society must face the cyclical fluctuations that occur in the economy. Faced with such inconvenience, the economy must attack by responding with a fair production process that works harmoniously, allowing growth in the economy that manages to face the normal increase in the needs of people and society.
Economic Sciences.
The economic sciences are the methodologies and tools of study of the past, present, and future elements, which will give the capacities to establish laws and models of behavior of consumers and organizations, in how insufficient resources will be used, to obtain profits, returns, and benefits, both in economic and social terms. For this reason, economic sciences can be classified as sciences that analyze the past or the history in general of the economy, its present, and possible future behavior.
What is the use of economic sciences?
The economic sciences are designed to be at the service of people, groups, organizations, and communities, among others, through the study of the relationships that occur between the social and the monetary, the deficiencies that exist and how to satisfy them, the welfare of people and capital as a source capable of offering tools to achieve growth. Economic sciences measure the development and availability of resource management so that there is the ability to use the knowledge obtained to optimize distribution, generation of opportunities, and wealth. For example, the person who is reading this article at this moment could use economic science to find the place where it will be better to invest his money, the organization to which he will give that money,
Who uses the economic sciences?
As mentioned in the previous point, economic sciences can be used by many people, but being a little more specific, politicians can use them as a way to analyze, study and improve how the country to which they belong is growing, to be able to overcome the problems it has, increase jobs, fight recessions, among others. In the same way, economic sciences are of the utmost importance for the directors of organizations, whose goals include surviving and remaining competitive for many years.
Concepts that build the economic sciences.
Although at the beginning of this article some key concepts were cited, so that the reader could better understand this article, the concepts that are adjusted for the study of economic sciences will be written here, some of these concepts are the analysis of elaboration of products, consumption, production of wealth and how it is distributed, obtaining resources and how their use is optimized, the study of spending to find the point of efficiency, the relationship between raw materials, the process that is carried out to transform it into a certain product, how it is going to be distributed and the consumers it will reach, all this within a cycle that is aware that all those who participate can benefit, growing everything they manage to invest.
The benefit of economic sciences.
I believe that the best benefit that can be derived from the use and study of the economic sciences is to be able to achieve a balance and development of all the entities that interact throughout the process, including the macroeconomic and microeconomic parts (also explained in this article). ), the particular benefits that each country will have, the organizations themselves, and any person who decides to use them.
Likewise, it is expected that all the investments made by the aforementioned entities will increase considerably, have good returns, and the profit margin (in the case of organizations) will grow.
Thesis proposal.
How political changes (presidents, governors, senators, among others) can cause the economy of the Córdoba – Orizaba area to grow or decrease.
Goal.
Determine if the economy of the area grows or decreases, in the period in which more political changes will be made, due to the different speculations that this provokes.
Thanks.
I thank my family, for giving me all the support and encouragement to continue day by day, the Technological Institute of Orizaba for opening its doors to me and allowing me to continue my studies with the Master’s Degree in Administrative Engineering, and Dr. Fernando Aguirre y Hernández for motivating me with his knowledge in the seminar of Fundamentals of Administrative Engineering to carry out each of the assigned articles.
Conclusion.
The economy has accompanied the human being for many centuries, it is the basis of many important civilizations, and when we want to talk about history, we have to touch on the concept of economy. For this reason, an economic model must always be available, whether in a country, an organization, r a person, to have satisfactory growth and development.
It is always important that we all have an idea of what the economy is, whether it is for mere general knowledge, to be able to make our investments yield more, or if we are CEOs of some organization to make it competitive for a long time, for the politicians of the different countries of the world, in short, the economy is everywhere and we must always keep it present in our lives.
Bibliography.
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BBVA. (March 11, 2015). BBVA . Retrieved from https://www.bbva.com/es/laeconomia-en-la-historia-una-mirada-al-pasado-una-visión-de-futuro/
Definitive. (May 3, 2015). Concept definition. Retrieved from http://conceptodefinicion.de/economia/
EcuRed. (May 10, 2018). EcuRed. Retrieved from https://www.ecured.cu/Ciencias_sociales
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