ABSTRACT
This chapter highlights the difference between economics and policy-making, and then it examines the methodological individualism, the role of time and uncertainty, failures and opportunity costs. It shows the nature of economics and the essence of methodological individualism upon which economists have written scores of articles and books. Time affects the economic way of thinking from two different perspectives, which have originated the static dynamic dichotomy and the debate on the role of uncertainty. Common parlance and academic writing frequently distinguish between the analyses relating to individual agents and those regarding collective units such as a community. According to line of thinking, the former analyses would belong to the realm of micro-economics, whereas the latter would be a matter of macro-economics. As a result, most contemporary economics is no longer an attempt to explain human behaviour under scarcity constraints, but rather a preliminary step towards active, top-down intervention in order to improve people's well-being.
