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'Economics is the study of money.' is a common misconception
Posted on: April 4, 2025 at 22:59:59 CT
JeffB MU
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Yes, economics obviously has a lot to say about money, and in fact one of the basic purposes of economics is to explain the different prices—which are quoted in units of money—of various goods and services being sold in the market place.
Contrary to this popular misconception, economics is broader than the mere study of money. In its widest scope, economics can be defined as the study of exchanges. This would include all of the exchanges in a normal market setting, where the seller hands over a physical object or provides a service, and in return the buyer hands over the appropriate amount of money. But economics also studies cases of barter, where the traders exchange goods or services directly with each other, without using money at all.
Pushing it to the extreme, economics even has a lot to say about cases where a single, isolated person takes actions to improve his or her situation. This is often called “Crusoe economics,” after the fictional character Robinson Crusoe who was shipwrecked on an (apparently) deserted island. We will study Crusoe economics in Lesson 4. It will be clear that even an isolated person behaves “economically” because he takes what nature has given him and exchanges the status quo for an environment that he hopes will be more pleasant.
The common theme running throughout all of the examples of exchanges is the concept of scarcity. Scarcity can be succinctly explained by the observation that there are limited resources and unlimited desires. ...
https://mises.org/mises-wire/new-course-lessons-young-economist
Contrary to this popular misconception, economics is broader than the mere study of money. In its widest scope, economics can be defined as the study of exchanges. This would include all of the exchanges in a normal market setting, where the seller hands over a physical object or provides a service, and in return the buyer hands over the appropriate amount of money. But economics also studies cases of barter, where the traders exchange goods or services directly with each other, without using money at all.
Pushing it to the extreme, economics even has a lot to say about cases where a single, isolated person takes actions to improve his or her situation. This is often called “Crusoe economics,” after the fictional character Robinson Crusoe who was shipwrecked on an (apparently) deserted island. We will study Crusoe economics in Lesson 4. It will be clear that even an isolated person behaves “economically” because he takes what nature has given him and exchanges the status quo for an environment that he hopes will be more pleasant.
The common theme running throughout all of the examples of exchanges is the concept of scarcity. Scarcity can be succinctly explained by the observation that there are limited resources and unlimited desires. ...
https://mises.org/mises-wire/new-course-lessons-young-economist
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'Economics is the study of money.' is a common misconception - JeffB MU - 4/4 22:59:59