Question

Explain the scarcity definition of Economics and assess it?

Answer 1

1. Lionel Robbins published a book “An Essay on the Nature and Significance of Economic Science” in 1932.
2. 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

1. Ends refer to human wants.
2. Human beings have unlimited number of wants.
3. Resources or means that go to satisfy the unlimited human wants are limited or scarce in supply.
4. The scarcity of a commodity is to be considered only in relation to its demand.
5. Further the scarce means are capable of having alternative uses.
6. An individual grades his wants and satisfies first his most urgent want.
7. Economics, according to Robbins, is a science of choice.

Criticism:

1. Robbins does not make any distinction between goods conductive to human welfare and goods that are not.
2. Economics deals not only with the micro-economic aspects of resource-allocation and the determination of the price of a commodity.
3. Robbins’ definition does not cover the theory of economic growth and development.