The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists. It is the dominant social formation today. Capitalism is defined in more detail in Chapter 2 . Economics is a 20th century term. In the 19th century it was called political economy .
Some economists still prefer the old term.
There are two types of underemployment . That and other essays in Schumacher's Small is Beautiful provide an antidote to the limitations of the economist's outlook. That is the main purpose of this introductory chapter to examine why we need economics and to define economics. The purpose of this book is to help the reader understand capitalism . This chapter explains why this is best accomplished by examining the capitalist economy historically .