ECONOMIC LAWS, and COMPARISON OF ECONOMIC LAWS

ECONOMIC LAWS

         Economics is a social science. It has been commonly observed that people, while living in society, show a similar economic behavior. This economics behavior in different aspect of economic life has been summed up as a set generalization which is known as economic laws. Thus, an economic law is a statement, concluded and inferred on the economic behavior of the people in general. In other words, economic laws are supposed to govern and explain all economic activities of the people living in a society.

       What is economic behavior and what economic activities. Mentioned in the definition of an economic law? To answer this question, we refer back to Robbins definition of economics. Robbins says that economics is a science which studies human behavior as a relationship between multiple ends and scare means which have alternative uses. from this definition we can easily gather that the use of limited resources in a pursuit to satisfy unlimited wants reflects the economic behavior or the economic activities of the people. thus we can say that economic laws are “the statement of tendencies by which human beings make use of scarce resources, obviously in an alternative fashion, with a view to satisfy unlimited wants” for example, the general tendency on the part  of the people is that they purchase more at a lower price and vice-versa, if all other things remain constant (or ceteris paribus). This economic tendency has been generalized as an economic law called law of demand. Similarly, many economic laws have been made to cover tendencies in economic life e.g. law of diminishing marginal utility, law of supply, law of substitution, law of variable proportions etc.

     Professor Marshall has defined economics laws as follows:

 “Economic laws, or statement of economic tendency are those social laws which relate to branches of conduct in which the strength of the motive chiefly concerned can be measured by money price”.

COMPARISON OF ECONOMIC LAWS

(A) WITH STATUTORY LAWS: Statutory laws or laws of the state are made by the legislature or the elected representative of the people. These laws are written in black and white for the people to obey. There is an executive or the police force which makes sure that these laws are being follows by the people. those who violate statutory laws are caught and presented before the court for the award of punishment. This means that there is a judiciary for the proper implementation of the laws. Thus, statutory laws are a binding force on the people and violation of the laws is a crime.

         As far as Economic laws are concerned, there is no such thing as legislature, executive or judiciary to make enforce the laws. Economic laws are simply general Economic tendencies of the people. These laws are the statements of Economic realities of life.

The violation of Economic laws only amounts to this is he wastage of economic resources of an individual or a society. for example, if a person does not purchase a larger quantity of a product at a lower price, he only loses some part of his total utility and this is considered to be his personal matter.

            An important point in this connection is that statutory laws can be abrogated or amended by the legislature. whereas no institution can do so with economic laws. The reason is that economic laws represent economic realities of life and it is not possible to change the realities.

(B) WITH MORAL LAWS: Moral laws are the most accepted values of a society particularly based on the teachings of a religion.  These laws clearly tell us either to do something or not to do something e.g. speak the truth and do not tall lies, be honest in business and do not indulge in black-marketing, smuggling etc. help the poor and do not exploit them. Moral laws are permanently accepted by the people for their own spiritual well-being. Those who follow moral laws enjoy a respectable position in a society and who do not follow them lose their status.

       As far as Economic laws are concerned, there are not based on the value system and, hence, do not tell us either to do something or not. These laws merely reflect economic tendencies of the people in general and are used for economic uplift of the people e.g. law of demand and law of supply etc.

       The co-relationship between the two kinds of laws is very interesting. Economic activities bases on moral values lead to non-economic activities. For example, honestly in business, commitment with natural ideology in the choice of develop on strong footing; whereas immoral and illegal activities like adulteration, theft, smuggling, black-marketing etc. are all non-economic activities. Thus, the economic activities of a society must be based on moral values.

(C) WITH THE LAWS OF PHYSICAL SCIENCE/ NATURAL SCIENCE: Physical / Natural science e.g. Physics, Chemistry, Biology, Geography etc deal with matter. These science are made by experiments on the matter in the laboratories. Since matter is a lifeless thing. The laws made in connection with the matter always prove to be exact and definite. They can be tested anywhere, for example, we study in physics that velocity will decease when pressure is increased. Chemistry tells us that H2O always be water and in Biology protein always consists of carbon, Hydrogen, Oxygen, and nitrogen. These laws clearly show definiteness and exactness and, therefore, do not change as they represent the natural phenomena.