IMPORTANCE TO WEALTH DEFINITION
The definition gave too much importance of wealth and ignored human welfare and moral values. Because of these weaknesses, Adam smith’s definition of economics could not be accepted.
- WELFARE DEFINITION:
According to Marshall in his book titled “principle of Economics”. Defined economics is the study of man in ordinary business of life. It examines that part of individual and social actions which is closely connected with the attainment and the use of material requisites for well being.
The main features of Marshall’s definitions are:
- Economics is a social science and it studies the economic activities of social normal and real man.
- Wealth is a means while the ends are human welfare i.e. wealth is for man and man not for wealth.
- The central point in the study of Economics is man’s material welfare.
Strongest attack on Marshall’s Definition comes from Prof. Robbins. The main criticisms of Marshall’s definition are;
- Wrong concept of material goods. Economics is not all about the study of material goods. In reality it is not easy to distinguish material things and immaterial things. Economics also studies immaterial goods such as the services of teachers, doctor, advocates, singer etc.
- Economics has no relationship with the material welfare according to Prof. Robbins. Economics can’t be linked with material welfare it is because;
- The concept of welfare cannot be defined exactly.
- In economics we study a number of such activities which cannot be regarded goods from welfare point of view E.g. war, production of home etc.
iii. Economics do not have appropriate scale of measurement by which welfare can be measured.
- Not a social science.
According to Robbins, Economic is not a social science rather it is a human science.
- Wrong division of human activities in Economics.
Marshall Division of human activities was also wrong. According to Robbins every activity has main aspects and one of them is economic aspect.
- Classification – Marshall Definition is classified. There are many categories but the destination between there is not clear Eg ordinary business, social and unsocial, material and immaterial, economic and non-Economic etc.
Marshall’s definition was better than Adam smith’s definition yet was rejected after sometimes because of these weaknesses.
Lionel Robbins published a book “An Essay on the Nature and Significance
of Economic Science” in 1932. According to him, “economics is a science which
studies human behaviour as a relationship between ends and scarce means which
have alternative uses”. The major features of Robbins’ definition are as follows:
a) Ends refer to human wants. Human beings have unlimited number of
b) Resources or means, on the other hand, are limited or scarce in supply.
There is scarcity of a commodity, if its demand is greater than its supply. In
other words, the scarcity of a commodity is to be considered only in relation to
c) The scarce means are capable of having alternative uses. Hence, anyone
will choose the resource that will satisfy his particular want. Thus, economics,
according to Robbins, is a science of choice.
Criticism: a) Robbins does not make any distinction between goods conducive
to human welfare and goods that are not conducive to human welfare. In the
production of rice and alcoholic drink, scarce resources are used. But the
production of rice promotes human welfare while production of alcoholic drinks
is not conducive to human welfare. However, Robbins concludes that economics
is neutral between ends.
b) In economics, we not only study the micro economic aspects like how
resources are allocated and how price is determined, but we also study the macro
economic aspect like how national income is generated. But, Robbins has
reduced economics merely to theory of resource allocation.
c) Robbins definition does not cover the theory of economic growth and
According to Lionel Robbins and his followers like Stigley, Samuelson, Carnations and many other. Modern Economists defined economics as;
- A science which studies human behavior as a relationship between ends and scarce means which have alternative uses.
FACTS OF ROBBIN’S DEFINITION.
According to Robbin’s and his follower Samuelson