Economics is the social science that analyzes the production, distribution, and consumption of goods and services. Today the term economics is a part of common speech in everyone’s vocabulary.

The term “economy,” from which we get “economics,” comes most directly from the old French word “economie,” meaning “management of a household.”

The French adopted the term from the Latin word “oeconomia,” which was in turn derived from the Ancient Greek word οἰκονομία (oikonomia, “management of a household, administration”) from οἶκος (oikos, “house”) + νόμος (nomos, “custom” or “law”), hence “rules of the house(hold)” i.e., how people earn income and resources and how they spend them on their necessities, comforts and luxuries.

With the passage of time, the word “okionomia” was used for an economy as whole in the sense that how a nation takes steps to fulfil its desires and preferences with the help of scarce means.

That’s why economics was called political economy in its early ages

The oldest recognized written work in the field of economics is Oeconomicus, a book on farming



and  household management,written by the Greek philosopher Xenophon (430-355 B.C.).

Despite the Greek origins of the term, economics was not an important field of study for the ancient Greeks, who, despite occasional references to economic matters, were more interested in philosophy and ethics.




Political economy was the earlier name for the subject, but economists in the late 19th century suggested ‘economics’ as a shorter term for ‘economic science’ that also avoided a narrow political-interest connotation and as similar in form to ‘mathematics’, ‘ethics’, and so forth.

Political economy, is branch of social science that studies the relationships between individuals and society and between markets and the state, using a diverse set of tools and methods drawn largely from economics, political science, and sociology.

The term political economy is derived from the Greek word “polis”, meaning “city” or “state,” and “oikonomos”, meaning “one who manages a household or estate.” Political economy thus can be understood as the study of how a country—the public’s household—is managed or governed, taking into account both political and economic factors.

The earlier term for ‘economics’ was political economy. It is adapted from the French Mercantilist usage of économie politique, which extended economy from the ancient Greek term for household management to the national realm as public administration of the affairs of state.

In 1767 Sir James Steuart published “An Inquiry into the Principles of Political Economy”,

Sir James Steuart

Sir James Steuart

the first book by a Scottish economist with ‘political economy’ in the title, explaining usage of the term as that:

“[just as] economy in general [is] the art of providing for all the wants of a family, [so the science of political economy] seeks to secure a certain fund of subsistence for all the inhabitants, to obviate every circumstance which may render it precarious; to provide everything necessary for supplying the wants of the society, and to employ the inhabitants … in such manner as naturally to create reciprocal relations and dependencies between them, so as to supply one another with reciprocal wants”.
The title page gave as its subject matter “population, agriculture, trade, industry, money, coin, interest, circulation, banks, exchange, public credit and taxes”.


Therefore Political science & economics are closely related. Historically economics developed as a part of Political science .It was then known as Political economy. Here the main function of economics was to find out ways & means of mobilising maximum possible revenue for the state. Economics therefore was an instrument of furthering the purpose of the state.

Today it is no longer a branch of political science but a full fledged subject by itself. The modern economists assign a much wider role to economics in the social life of the community.(i.e. the basic issues like employment, distribution of income & consuming it, productivity etc.), besides just state revenue.


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