Marshall defines economics as the study of mankind in the ordinary business of life and their attainment of material well-being. His welfare definition emphasizes that (1) wealth is a means to human welfare, not the ultimate end; (2) economics studies ordinary people, not isolated individuals solely seeking wealth; and (3) economics examines material activities related to earning and spending money. Robbins criticizes this definition for being too narrow in focusing only on material welfare, for the vague concept of welfare, and for involving value judgments rather than remaining ethically neutral.

1. WELFARE DEFINITION
ALFRED MARSHALL
1842-1924
ENGLISH ECONOMIST
Major Works
Economics of
Industry 1879,
Principles of
Economics 1890
Industry and Trade
19219
Money ,Credit And
Commerce 1924

2. • 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 .

3. DEFINITION
Economics is the study of mankind in the day-to-
day business of life;
it is linked to human welfare;
 its utilization is supposed to create opportunities
for mankind.

4. FEATURES OF MARSHALL’S DEFINITION:

5. (1) WEALTH IS NOT THE BE-ALL AND END-ALL
OF ECONOMIC ACTIVITIES:
• Wealth is sought for promoting human welfare.
• Hence, wealth is only a means to the fulfillment of an end
which is human welfare.
• Thus, wealth is relegated to a secondary place.

6. STUDY OF AN ORDINARY MAN:
• Economic man’, i.e., a man whose only motive is to acquire wealth for its own
sake and who is not influenced by human considerations in the pursuit of wealth.
• Rather, Economics deals with ordinary men and women who are swayed by love,
affection and fellow-feelings and not merely motivated by the desire to get
maximum monetary advantage.

7. ECONOMICS IS A SOCIAL SCIENCE:
• Economics is a social science and not one which studies isolated individuals or
Robinson Crusoes.
• Economics study people living in society influencing other people and being
influence by them.

8. ECONOMICS DOES NOT STUDY ALL
ACTIVITIES OF MAN:
• Economics does not study all the activities of man. It is concerned with those actions which can be brought directly
or indirectly with the measuring-rod of money. Marshall clearly explains that economic activity is different from
other activity. For example,
• If a student visits a friend who is ill, it is a social activity,
• If a person give his vote in an election, it is a political activity.
• If a person goes to church/temple it is a religious activity.
• Marshall says that economic activity is different from the above mentioned activities.
• A farmer going to the field or a worker going to the factory to work is an economic activity—they are
working to earn money.
• With that money they will buy things to satisfy their wants. In other words, economics deals with wants,
efforts and satisfaction.

9. •man earns money to get material welfare."
Marshall gives importance to welfare and
man. As such this definition came to be
called the welfare definition.

10. STUDY OF MATERIAL WELFARE
• Economics is concerned with the ways in which
man applies his knowledge and skill to the gifts of
nature for the satisfaction of his material welfare.
Economics studies only ‘material requisites of well-
being’ or causes of material welfare.

11. CRITICISM

12. CLASSIFICATORY AND IMPRACTICAL
• Robbins rejected Marshall’s definition as being classificatory because it makes a
distinction between material and non-material welfare and says that Economics is
concerned only with material welfare.
• Robbins does not think it right for the economists to confine their attention to the
study of material welfare,
• because in the actual study of economic principles, both the ‘material’ and
‘immaterial’ are taken into account.

13. NARROW DOWN THE SCOPE OF ECONOMICS.
• According to Robbins, the use of the word “material” in the definition of
economics considerably narrows down the scope of economics.
• There are many things in the world which are not material but they are very useful
for promoting human welfare.
• For example, “the services of doctors, lawyers, teachers, dancers, engineers,
professors etc., satisfy our wants and are scarce in supply”.
• If we exclude these services and include only material goods, then the sphere of
economics study will be very much restricted.

14. RELATION BETWEEN ECONOMICS AND
WELFARE
• The second objection raised by Robbins on welfare definition is on the
establishment of the relation between economics and welfare.
• According to him, there are many activities which do not promote human welfare,
but they are regarded economic activities, e.g., the manufacture and sale of
alcohol or opium, etc.
• Here Robbins says, “Why talk of welfare at all? Why not throw away the mask
altogether”.

15. WELFARE IS A VAGUE CONCEPT.
• The third criticism raised by Robbins was on the concept of “welfare”. In his opinion welfare
is a vague concept.
• It is purely subjective.
• It varies from man to man, from place to place and from age to age.
• Moreover, Robbins questioned the use of a concept which cannot be quantitatively
measured and on which two persons cannot agree as to what is conductive to welfare and
what is not.
• For example, the manufacturing and sale of guns, tanks and other warheads, the
production of opium, liquor etc. are not conducive to welfare but these are all economics
activities. Hence, these cannot be excluded from the study of economics

16. IT INVOLVES VALUE JUDGMENT
• inally, the word “welfare” in Marshall’s definition involves value judgment and
brought Economics to the realm of ethics.
• Whereas, according to Robbins economics is neutral as regards ends. It is not
supposed to be its function to pass moral judgments and say what is good and
what is bad.