Definition of Economics should be revised

Simple definition of economy: Optimum allocation of rare resources but we need information to do so.

“The study of how people use their limited resources in an attempt to satisfy unlimited wants.”

“The study of choice and decision-making in a world with limited resources.”

“Economics is the social science that studies the production, distribution, and consumption of goods and services. The word 'economics' is from the Greek for (oikos: house) and νόμος (nomos: custom or law), hence "rules of the house (hold)."

“Scarcity means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problem. The subject thus defined involves the study of choices as they are affected by incentives and resources.”(wikipedia)

We are all economists. Why?

We all know about scarcity, everyone looks at his pocket and knows about time limit and scarcity of resources. We try to overcome this problem by recycling and looking for alternatives but still we can’t find a solution. Look at time scarcity, we create online banking to avoid travelling and queues and produce frozen foods to decline the time for cooking, employing babysitters to look after our children but still by the end of the day we wish the day was 26hours.

We are all trying to maximize our benefit which means we have several goals (sometimes you can read it as needs or wants) and we try to achieve them subject to our available resources. We want to have a house or earn a degree or millions of other needs but we cannot satisfy all of them.

We are all opportunistic; we usually only care about our self, “our self” can be one person or a family or a club and try to maximize our own benefits equally minimize our own costs. This requires interactions with other groups of people or individuals. We study game theory to learn how to deal with this.

Those of us who are not opportunistic are not rational! But not vice versa. If you help a charity you are maximizing your utility indirectly?!

We all have limited information. We don’t know all the prices in the market and we don’t know who is honest in his job and who is not? Which shop has sale in what day? Which firm needs an employee?

If we want to be informed we should pay the cost. Information is not free and moreover costly to obtain. Sometimes we even don’t know the true value of our resources.

In economics we are talking about above issues, did I miss anything? Even the definition of Economic is based on above concepts. I said all those things to make a conclusions, I want to claim that information is the most important concept among those I brought before.

“Information economics examines how information (or a lack of it) affects economic decision-making. An important focus is the concept of information asymmetry, where one party has more or better information than the other. The existence of information asymmetry gives rise to problems such as moral hazard, and adverse selection, studied in contract theory. The economics of information has relevance in many fields, including finance, insurance, contract law, and decision-making under risk and uncertainty.”(Wikipedia)

I define Information as having knowledge therefore more information means having more knowledge in every field. This doesn’t require that each person has all the knowledge in all fields but rather having all the information (knowledge) related to his own life. This is unrealistic but with growing of Internet, everyone can get all the necessary knowledge very cheap and just by spending time.

So an Informed person is a person who knows any necessary knowledge related to his life. An Informed society has all the knowledge, imagine even those that are not discovered.

Now lets see if we have any economical problem left.

Scarcity: We can overcome this by absolutely (100 percent) recycling everything or making alternative fuels or even refine oxygen with cheap price. Don’t forget being “Informed” is a strong assumption. This means we not only have a solution to each problem but also we have the best (cheapest) solution to that problem. I think if we go over other problems with this assumption we will see how beautiful life is!!!!

Is it really that much good to be Informed? Are we going to solve the problem of growth, unemployment and welfare with this?

I will leave the answer to this question open because it really needs lot of thinking and writing and evaluating different aspects to answer it perfectly.

++ The factual accuracy of this article is disputed. I need to rewrite this article.