by Ken Matesz

“If you don’t value your time, neither will others.  Stop giving away your time and talents.  Value what you know and start charging for it.”                       Kim Garst

Most people today have never had any education in economics.

The result is that too many think that economics is the study of money and investments.

Nothing could be further from the truth.

Economics is the study of why people do or do not take action. It is the study of how people manage their lives. In fact, the word “economic” comes from a Greek word meaning “household management.”

That’s it! That is all that economics is about: Human action.

Money just happens to be something we use to represent either labor (actions we take) or property (things we might want).

In other words, we use money to trade things we do for things we want or to easily facilitate trading things we have for other things we want.

Without money, we would trade things for things or we would trade things we do for things we want, right?

You can see that money is completely unnecessary to have and run an economy. It’s silly to think economics is about money when money is not necessary for an economy!

Money is nothing more than a convenient way to trade with each other.

Why Do We Trade?

We trade with others to survive, mostly. But we also trade with others because they have things we want that may not be necessary for survival.

For most people, it’s quite simple: They go to work. Their employer pays them for their time. The employee uses the pay (money) to buy food, shelter, clothing and luxuries.

Simple.

If we really want to understand economics, though, we have to understand why people trade the way they do.

Why do you give your money for food?

Why do you hand over cash for clothes?

Why are you willing to fork over money for a house or for rent?

Do you really understand why?