"Economics" was the word for running a house. What happened to it?

The word before the science

Every time someone says "the economy" they are using a household word. Economics comes from Greek. Oikos is a house or household. Nemein is to manage or share out. Put together, oikonomia meant running a household: its people, its stores, its land and its money.¹ That is the oldest sense of the word, and it is the sense the oldest books use.

The word was never only that, even in Greek. Writers used it for the running of a city, for the arrangement of a speech, and for the way a doctor orders a treatment.² But the house came first, and the other uses were borrowed from it.

The word comes into English

"Economy" arrived in English in the 1530s. It meant household management.³ "Economics" followed in the 1580s, meaning the art of managing a household.³ For the next two centuries an "oeconomist", spelled the old way, was someone who ran a house well. The sense "frugality" is recorded from the 1660s. The sense "the wealth and resources of a country" is recorded from the 1650s, as shorthand for a newer phrase, "political economy".³

"Economics" as the name of a science of wealth is recorded from 1792.⁴ So the word had been an English household word for about two hundred years before anyone used it for what universities now teach.

How the state borrowed it

The phrase that did the borrowing was "political economy". A French writer put it on a book title in 1615.⁵ The first English book with the phrase in its title came in 1767, and it still opened with the family. Its author defined economy as "the art of providing for all the wants of a family, with prudence and frugality", and then said that what economy is in a family, political economy is in a state.⁶ The state was the household scaled up.

Nine years later Adam Smith defined political economy as a branch of the science of a statesman or legislator.⁷ The household had gone from the sentence. From then on the subject was the nation, and the house was left with nothing to call its own.

Then the adjective went too

In the 1870s economists began dropping "political". In 1879 William Stanley Jevons argued for "the single convenient term Economics" in place of "the old troublesome double-worded name of our Science". He credited another writer, Henry Dunning Macleod, with bringing the name back, and noted that Alfred Marshall at Cambridge had adopted it too.⁸ Marshall's textbook of 1890 carried "Economics" in its title, though its first sentence still gave both names.⁹

That is how a word for running a house became the name of a science of nations and markets. Nobody decided it. The word was taken up the ladder, and the bottom rung was left empty.

The household kept taking it back

The story does not end with the loss. In 1899 a group meeting at Lake Placid, New York, chose the name "home economics" for a new subject and defined it as "a distinct section of the general subject of economics".¹⁰ In 1965 Gary Becker put the household back into economic theory as a small firm that produces what it consumes from bought goods and its own time.¹¹ In 2006 the president of the American Finance Association named "household finance" as a field and said it "still lacks definition and status within our profession".¹²

Three times in a century the household reached for its word. Each reach was partial: a school subject, a theory of time use, a branch of finance. None gave the ordinary household a name for its own economy.

Why this matters to your money

A household that has no word for what it does cannot easily think about it. For most of recorded history the reverse was true. Running a house was the subject that had the word, the books, the account-keeping and the warnings about the other party. What you are doing when you manage your money is the original economics.