Economic needs, their essence and classification

Economists, scientists and thinkers paid much attention to the study of the nature of human needs, rightly believing that social relations are based on these needs .

Economic needs are internal incentives that induce social production of necessary goods, works and services. Needs are encouraged to use the available resources as efficiently as possible. Economic needs also show the attitude of people to the conditions of their activity. They also show the relationships that arise between people in the process of distribution and production of the necessary economic benefits.

Classification of economic needs:

By subjects:

• Personal (individual), collective, public (food, housing, clothing, social needs in a reasonable leader, a positive psychological climate, good working conditions, recognition in the collective.) The economic needs of society are economic growth, a favorable economic climate in the country, the absence of inflation , Deficit, unemployment;
• The needs of enterprises, households, states that are economic entities (the need for high-quality goods, works and services at low prices, increasing the competitiveness of products, reducing costs, maximizing profits, increasing revenues to the state budget, etc.)

On the objects:

• Physiological - are due to the fact that man is a biological being, who needs to maintain his life;
• Social - the need for information, communication, education, recognition of merit by society;
• Material - this is the need for services and goods that have a material form;
• Spiritual - the needs for creativity, self-improvement, talent development;
• Priorities are those that can be satisfied with basic necessities;
• Secondary - those that are satisfied with luxury goods;

The most obvious economic needs of society and their hierarchy in the life of each person is depicted in the Maslow pyramid. Economic needs are located here as follows (from top to bottom from less important to basic ones):

• Self-realization
• Respect, recognition of society
• Social (love, friendship, etc.)
• Safety and security
• Physiological

This classification to date is the most universal, as it proceeds in a greater degree from the biological needs of the species, and is not so influenced by culture and other characteristics that distinguish people.

Economic needs: classification according to the degree of their feasibility:

Absolute - arise and show up at the current level of the development of technology and science (for example, the demand for mobile phones was impossible a few decades ago because of the lack of technical capability);

Real - can be realized at the current level of science and production;

Solvency - those that a person is able to satisfy with the help of his income. It is these needs that most interest manufacturers.

But that's not all. Very many public needs also develop historically, they depend very much on cultural and religious characteristics, as well as on climate, geographical conditions, gender, age and other characteristics. So, the needs of people who inhabit different countries, say, the inhabitants of Sweden and Australia or professing different religions can radically differ among themselves.

An important feature of the needs is that they can never be fully satisfied, while the possibilities for meeting them are limited by the available resources. After all, a person is so arranged that his desires usually exceed the possibilities for producing goods that quench them. On this basis, the law of exaltation of needs was even formed , which says that they increase faster than the production of goods. Even in the century before last, Engel's regularity was noted, which says that as welfare grows, the share of costs associated with essential products decreases. In other words, only the smallest part of income goes to food, while the main expenditure falls on luxury goods.