Here is your essay on Economy!
In pursuit to better living man developed agriculture, commerce and industry. The expanded economic activity made him more and more dependent on other members of this community.
In the simplest societies, life revolved around hunting or gathering of wild fruits and nuts. There were no specialist economic tasks and society was not subdivided in any way. With the gradual development of agriculture, there came into existence new forms of social organization having the agriculture based economy.
Handicrafts developed at first as part time occupations. Increase in production implied movement of goods for wider distribution. It necessitated elaborate marketing, exchange, payment, specialisation, entrepreneurship and greater investment in capital. Mercantilism, capitalism and modern complex industrial system followed in consequence.
A revolution occurred in economic life of mankind with the emergence of factory system of production as mechanical power was applied to production. This system of production became dominant during the nineteenth century, first in Britain and then elsewhere.
The birth of the new economic order called capitalism brought about developments of mass production, specialisation, exchange, and division of labour and gave birth to a proliferation of economic organisations such as banks, stock markets, insurance corporations, industrial corporations, chambers of commerce and merchant associations.
With the advent of industrial era in Europe, the scope for economic activity expanded and with it also expanded the era of state activity. Feudalism, mercantilism, capitalism and the modern welfare state – capitalist, socialist or that of mixed economy type are all socio-political type. The nature of political forces and social processes are supplementary and complementary.
Economic activity is concerned with production distribution and consumption. The fact of human wants and the scarcity of goods and services must be faced by every society. Therefore, social life confronts us with three functional imperatives. We must provide for the production, distribution and consumption of goods and services.
Production involves the assembling and applying of human and natural resources in creation of goods and services. It involves the interplay of four factors: land, capital, labour and entrepreneurship. Land in economics is used in its widest sense. It includes, the land, the gift of nature such as minerals within it, the skills based on knowledge and the ability etc. Labour means exertion of physical or mental undertaking in the performance of task. It especially refers to physical work.
Production can be of three types: Primary production or industry (the extracting or gathering of underdeveloped natural resources from nature through agriculture, mining, fishing and forestry), secondary production or industry (transforming cotton into cloth and them to garment) and tertiary production-service activities of one short or another (marketing, banking, entertainment etc.).
All that is produced, is to be distributed within the social group according to laws of economics. Property raised or acquired is always a subject of distribution within the wider circle. Distribution required social mechanism by which goods and services are exchanged. In every society, there are laws that regulate the distribution of products.
Consumption means the ‘using up’ of goods produced. Production requires consumption and consumption necessitates production. If we are to consume, we must produce. Some of what is produced may be consumed immediately. Some may be stored for future generations. The accumulation of surplus over and above immediate needs may have the object of carrying people through lean periods.
Production, distribution and consumption circle in the modern time has expanded and is expanding.