Economics attempts to explain how the economic system of society works. Some economists use mechanisms such as ‘invisible hands’, price systems or human behavior. Neowalrasian economics has discovered the general equilibrium theory where conditions of a competitive equilibrium is provided. This theory fails because it can not be applied to real-world economic systems. Economics is an inductive science which must include real-life factors such as costs, self-organizing firms, the household, competition and inventories.
