Current definition

The current definition about economics comes from Adam Smith's work in his landmark book The Wealth of Nations (1776). Economics is substantially defined as the allocation of scarce resources in a context of limited alternatives.

Another definition proposal

Economics is the allocation of resources in order to serve well-being and happiness in the present and future world.

Discussion

You may first want to visit the list of different economies if you are not familiar yet with these concepts.


The proposed definition here is very different from the current one: it gets rid of greed and scarcity principles without refuting them. Note also that it doesn't take a position on the opposite principes of abundance and cooperation. This new approach integrates the ambivalence that emerges when joining opposed principles that compose the world. Why deny the existence of abundance as the existing reverse side scarcity. Why not give us the choice of perspectives?

The original definition of economy is the product of a Newtonian vision of the world. I tocmes from a time when celestial mechanics served as a model for the Universe and, by mirror effect, as a model for the society animated by causes and effects orchestrated by the Great Clockmaker (Voltaire). Although complexity and systemics serve as conceptual basis of today's economics, its issues remain formulated in the initial frame of scarcity. Constructivism? describes us as conceptual frame makers. Alternatives are also a product of the mind, not an objective fact. The limitations implicit in any referential frame are overcome by the abundance of possible referential frames. Therefore there are no choice limits in our mental construction of the world, and this point of view can update our definition of economics.

Some will object that, constructivism? or not, scarce resources do exist whatever we might argue and thus we must have a system to allocate them. For instance water is missing in Sahara. The answer to this objection is that the scarcity comes from our inability (or lack of desire) to solve the problem. Water is missing in Sahara because we have not yet deployed the organizational and human means to irrigate the land there. Take oil for example. It is far more scarce than water and we have quite effectively devised the means to bring it where it's scarce all around the globe. It will continue to be considered as potentially scarce (and a war maker) until alternatives energies are chosen. Once again, scarcity is nothing else but human.

In the new proposed definition, the word resources, applies to whatever human society considers as a resource: raw materials, energy, time, attention, information, training, etc. not just things that are scarce. In other words, anything we perceive as something measurable,whether scarce or abundant.

It can be further objected that, whatever the abundancies, scarcity comes in the end as what defines the final frame of economics and makes it a "science of limitations". To illustrate this point of view, we can say that anything that flows in pipes that are joined end by end together, the smallest diameter will detemine the final water debit. It's the law of the least common denominator (LCD). Individual time, limited by nature and drawing the lines of our maximal capacity (choosing, undertaking, consumming, etc), is the heart of the issue. This leads us to the main concept --the fact we always have to choose between different alternatives-- is called opportunity cost.

It might be interesting to dig in the following intuitions:

• The opportunity cost of a community is not equal to the sum of individual opportunity costs. The understanding of the metasystem transition theory? mechanisms from the individual to the collective level is crucial to understand the importance of this hypothesis. Surely the classical economics frame has widely explored this fact, but it's important to see it with the light of Collective Intelligence.

• The dynamics of opportunity cost probably change radically in a gift economy as well as in a knowledge economy. Interesting clues are already provided by the knowledge ecology, as practiced today in the open source software world (yet there is no real knowledge economy as most participants cannot make a living wiithin this world).

• We enter into an era in which our social being will have superposed states? that will represent us in the multiple anthropological spaces of the future cyberspace layers. This ubiquity will radically take us away from the current linearity and make us enter into a quantic economy?.

• The ultimate economy we can think of here is the wisdom economy?, an economy run by wisdom (no need to say collective wisdom because wisdom is about connectedness), i.e. the Art of Happiness.

• Last but not least, the design of new open source currencies?, by democratizing and making money a public tool, may open unsuspected economic perspectives.

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Links to dig in

• A shortlist of different economies
• The definition given by wikipedia