Adam Smith, the father of economics, said that man is an economic animal because he is always trying to improve his economic well-being. He is constantly working to earn money and acquire goods and services that will make his life better. He is also trying to save for the future and provide for his family.
Some of the reasons why man is called an economic animal include:
Self-interest: Man is driven by self-interest, which is the desire to improve one's own economic well-being. This self-interest leads people to work, produce, and trade goods and services.
Competition: Man is also driven by competition, which is the desire to be better than others. This competition leads people to work harder and innovate, which can lead to economic growth.
Limited resources: Man has limited resources, such as time, money, and energy. This means that he has to make choices about how to allocate his resources in order to satisfy his needs and wants.
Economic incentives: Man is also motivated by economic incentives, such as the desire to earn a higher income or save money. These incentives can lead people to work harder, save more, and invest more.
Cooperation: Man is also a cooperative animal, which means that he can work together with others to achieve common goals. This cooperation can lead to economic growth and prosperity.
Thus, man is called an economic animal because of his insatiable wants and limited means. He has to make a choice between the available alternatives based on his needs and priorities. He has to allocate his limited resources in such a way that he gets the maximum satisfaction.