Economics is the mechanism by which our various needs and wants may be satisfied. The Greek origin of the word “economics” can be roughly, but aptly, translated as “good housekeeping”, and of course any reliable household accounts will record the expenses incurred on satisfying those needs and wants, as well as the income that provides the means of doing so.

Skill in domestic economics therefore lies in judicious balancing of the two sides of this equation, ensuring that savings in one period are available to meet shortages in another.

When this homespun understanding of good housekeeping is elevated to its counterpart at the level of the community and, inevitably, the nation, the simplicity of its truth, although still present, becomes engulfed in the political morass and loses its clarity, objectivity and hence reliability as a record of economic activity.

There are, however, certain fundamentals that stand out beyond any political argument. For example, the most basic observation underlying economics is that, as individuals, none of us is completely self-sufficient: we can’t, and don’t, do absolutely everything for ourselves. Yet, on the reasonable assumption that we are of sound body and mind, without making a contribution (called “work”) we can’t expect others to do everything for us.

So what work should we do? As it happens, I personally fell into that category of teenager whose future career path was never clear. So my parents sent me to an industrial psychologist for aptitude testing. The report she duly received left them none the wiser: no particular avenue of work beckoned, since no particular aptitude shone out. The only positive recommendation was a negative: “Keep him away from architecture; any structure he designs is likely to collapse in record time.”

Fortunately, my case was the exception. Most people, either due to innate aptitude, drive or circumstance, are able, not necessarily at first, to optimize the fruits of their labour in the form of products that could be either goods or services. Commercial success in such work obviously implies that they achieved an advantage, in terms of either quality or price, or both, over their competitors. This principle, initially formulated by 18th Century economist David Ricardo, tells us that comparative advantage is what you do best while also giving up the least.

For example, you may be a great electrician and also an excellent dog- walker. But, commercially, your comparative advantage is your electrical skills because that is the area in which you will make most money. You can hire an hour of dog-walking services for less than you will make from doing an hour of electrical repairs. Another way of putting this is that your opportunity cost of dog-walking is high – every hour you spend doing it is an hour’s worth of lost revenue from undertaking electric repairs.

Because this is the principle on which the whole of society functions we can see that it is also the principle that gives rise to the division of labour. Clearly any particular industry will attract those most qualified to serve its needs. Conversely, in the absence of gulag-style coercion, people with particular qualifications and skills will quite naturally gravitate towards industries that require those skills.

Another way of seeing these principles at work is to see them as the cause of trade: if we are not self-sufficient, we must rely on others to provide what we otherwise would lack. But for that service, or those goods, they will require a form of recompense that we, by our work, must provide.

Hence the law expressed by the 18th/19th Century French economist Jean-Baptiste Say (often referred to, understandably, as the law of markets) declares that we produce in order to consume, or, production precedes consumption. Until we produce, we lack the wherewithal to pay for the satisfaction of our needs and wants.

That’s obviously the correct sequence: production must precede consumption – despite Keynes’ desperate, but failed, attempts to turn it on its head with his theory that stimulating aggregate demand will revive a sluggish economy.

Say, a keen follower of Adam Smith, was an economist and businessman whose liberal views upheld the virtues of entrepreneurship, free trade, competition and deregulation of any impediment to the natural process of business. If only 20th Century economists had adopted his lead!

Free trade principles dictate that its purpose is to benefit consumers, not producers - for on that way lie all the disasters of protectionism, whereby producing sectors are shielded from the natural operation of economic law, to the detriment and suffering of fellow citizens.