Definition of Economics

Investopedia defines the study of economics as follows.

“A social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants.”

This definition is typical but it is not exactly right.

A better definition is the study of survival. The commonly used definitions are right but they are incomplete. The most critical economic behaviors occur outside of what is normally deemed a market. The first transaction everyone born makes over and over throughout life is to trade freedom for comfort.
This is one reason why economic models do not work. The decision making process does not occur as it is popularlly explained.

Human beings are all capable of individual thought but they default to herd thinking. Most of what passes as a personal opinion is a notion the mind hears and records. The notion is only a notion but it is mistaken for a self generated idea.

One of the ingredients of a free market and a high standard of living is freedom. What throws mainstream economists off is that the rank and file in any economy trade their freedom for comfort out of instinct. A political system based on democracy is assumed necessary to support free markets. In order to have genuine self government it would be necessary to impose freedom on a population faster than the individuals can bargain away their freedom.

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