Question

Compare and contrast various definitions of Economics.

Answer 1

1. Wealth Definition : “Adam Smith”
Adam Smith is his book “An inquiry into nature and causes of wealth of nations” (1776) defines “Economics as the science of wealth”
Criticism:

1. For smith, Economics consists of ‘Wealth getting’ activities and ‘Wealth – spending’ activities.
2. An undue emphasis is given to material wealth.
3. It ignores human welfare which is as essential part of economics.
4. Ruskin and carlyle regard economics as a ‘dismal science’, “Pig Science” etc as it is against ethics.

2. Welfare Definition : “Alfred Marshall”
Alfred Marshall is his book “Principles of Economics” (1890) defines economics as : “Political Economy” or economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well-being. Thus, it is on one side a study of wealth; and on the other and more important side, a part of the study of man.
Criticism:

1. Marshall regards only material things.
2. He does not consider immaterial things, such as the services of a doctor, a teacher and so on.
3. The concept of welfare is not clearly defined.
4. Welfare vary with person, country and time period.
5. Welfare not only depends on the stock of wealth possessed but also on political, social and cultural activities of the nation.

3. Scarcity Definition: “Lionel Robbins”
Lionel Robbins published a book “An essay on the nature and significance of economic . science (1932). In it he defined “Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”.
Criticism:

1. Robbins does not make any distinction between goods conducive to human welfare and goods that are not.
2. Economics deals not only with the microeconomic aspects but also with the macro-economic aspects like how national income is generated.
3. Robbin’s definition does not cover the theory of economic growth and development.

4. Growth Definition: “Samuelson”
Paul Samuelson defines economics as “The study of how men and society choose, with or without the use of money to employ scarce productive resources which could have alternative uses, to produce various commodities over time, and distribute them for consumption now and in the future among various people and groups of society”.
Criticism :

1. Like Kohbin Samuelson states that the means are scarce in relation to unlimited ends.
2. Samuelson makes his definition dynamic by including the element of time in it.
3. It covers various aspects like production, distribution and consumption.
4. Samuelson treats economics as a social science in contrast to Robbins regards it as a science.

Conclusion :
Of all the definitions discussed above the growth definition stated by Samuelson appears to be the most satisfactory.