Definitions of Economics with Criticisms
Definitions of Economics
There is no unique definition of economics, which is recognized by all economists. The civilization has been changed and side-by-side the thinking trend of men has been changed. Consequently, we see the different definitions of economics in the different times.
Early economists that mean the classical economists such as Adam Smith, David Ricardo. John Stuart Mill etc., define economics which are given below:
According to Adam Smith:
“Economics is concerned with an inquiry into the nature and causes of wealth of nations”
According to J. B. Say:
“Economics is the science which treats of wealth”.
F. A. Walker says:
“Economics is the body of knowledge which relates to wealth”. In these definitions, wealth is the key word. All early economists have treated economics as the science of wealth.
1. No comments on the use of wealth. There is no direction on how to use wealth.
2. Economics includes both materials and non-materials wealth. However, there is no touch of non-materials wealth.
3. Human welfare has been ignored in their definition. Wealth must be used only for the human welfare. This concept has not been considered.
In the next time, neo-classical economist Prof. Marshall defined economics giving emphasis on human welfare.
Definition of Prof. Marshall or Marshallian definition:“Economics is the study of mankind in the ordinary business of life”
In this definition, we see a term that is “ordinary business”.
Ordinary business means “how the people will earn income and how the income will be spent for fulfillment of their different wants.
Prof. Marshall thinks that,
The basic objective of economics is to achieve human welfare by using wealth. I le said; Economics is on the one side a study of wealth and on the other and more important side, a part of the study of man.
According to Beveridge:
“Economics is the study of general methods by which men cooperate to meet their material needs”.
According to Cannan:
The aim of political economy is the explanation of the general causes on which the material welfare of human beings depends”.
In the Marshallian definition, first they all give emphasis on material things and then wealth Firstly,
– Material requisites of well-being
– Meeting of material needs
– Causes of material welfare
1. Prof. Marshall and his followers confined their attention in material welfare. In the actual study of economics, both the “material and non-material are taken into account. But here, non-material things have been ignored.
2. Emphasis on activities, which are related to human welfare. Many things that are not related to human welfare are considered in economics Heroin, alcohols etc.
3. Robbins rejected Marshall’s definition being classificatory. Because, it makes a distinction between material welfare and non-material welfare.
. 4. Marshall restricted the scope of economics. Ile ignored immaterial services like,
– Services of doctors
– Services of lawyers
-Services of teachers
-Services of nurse etc.
5. Scarcity problem is the basic problem of economics.
– Economics is not ethics. To judge good or bad is not a subject of economics.
– It is a neutral science. What has happened and what is possible to happen?
Definition of Prof. L. Robbins’s
Economics is the science, which studies human behaviour as a relationship between ends and scarce means, which have alternative, uses.
Three fundamental proposition of this definition
- Alternative uses
- End refers to wants.
- We have wants that are unlimited in number.
- If the wants had been limited, what would happen then? In that aspect, no economic problems are found in the society.
- Since our wants are unlimited. That’s why, we have to decide on which wants is more urgent and which is less urgent to lead our life. For this, economics is called a science of choice.
Wants are unlimited but the means to satisfy them are strictly limited. If the means are unlimited, no economic problems will be found in the society.
But our resources are scarce in the society. Our economic resources arc Land, Labour, Capital and Organization/ entrepreneurship. Since these resources are limited, our ability to produce goods and services are limited.
Scarcity word is used as relative sense in economics. But it is not used in absolute sense in economics. It is scarcity in relation to requirements. Suppose, small quantity of a commodity is prevailed in our society. But it has no use or nobody use it. Example, Rotten eggs that is not scarce in economic sense. On the other hand, huge stocks or commodity like wheat. It is called scarce when its demand is larger than supply.
Scarce means are capable of alternative uses.
Choice comes in again.
1. Robbins has confined his definition in the scarcity problems. He has ignored the human welfare
2. Social aspect of economics has been ignored in his definition.
3. Unemployment has not considered in his definition.
4. Economic growth and development haven’t considered.
5. More abstract and more complex – Robbins makes his definition.