Political economy

Anyone who has ever opened a good textbook on political economy cannot have failed to notice how it is intrinsically linked to resource scarcity. Political economy is that human science that deals with the production and distribution of wealth, price formation and, especially in the neoclassical framework, the maximisation of utility and profit functions. Economics was born as a science to optimise scarce resources. Scarcity is, therefore, the key concept on which the entire economic philosophy rests and which finds its justification in Ricardo's 'law of diminishing returns'.