Ethics is a social science. It deals with moral questions. It discusses the rules that govern right conduct and morality. It deals with questions of right and wrong. It aims at promoting good life.
There is connection between economics and ethics. While economics, according to Marshall, aims at promoting material welfare, ethics aims at promoting moral welfare. When we discuss economic problems, often we consider ethical issues. The government introduced prohibition in many states for ethical reasons, though there was heavy loss of revenue to it.
But Lionel Robbins strongly believes that an economist as an economist should not consider ethical aspects of economic problems. But many economists do not agree with him. They believe that economics cannot be dissociated from ethics. Even Marshall considered economics as a handmaid of ethics. He looked at economics as a study of means to better the conditions of human life.
Jurisprudence is the science of law. The economic progress of a nation depends to a great extent on its legal system. Good laws promote economic progress and bad laws act as an impediment to growth. For example, in the past when we welcomed foreigners to invest in our country, they used to say our taxation was complex and not good. Of course, now things have improved. So we must have simple and clear laws in the fields of taxation and labour legislation to promote economic progress.
Psychology is the science of mind. It deals with all kinds of human behaviour. For example, we have child psychology, mob psychology, industrial psychology and criminal psychology. But economics studies one aspect of human behaviour. It studies human behaviour with reference to unlimited wants and limited means. Of late, psychology has become important in analyzing economic problems. To deal with labour problems, we must understand industrial psychology. And a good businessman must understand the psychology of buyers whenever he wants to change the price of his good. Many important laws of economics are based on psychology. For example, we have the law of diminishing marginal utility. It tells that the more and more of a thing you have, the less and less you want it.
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