1. Name – Dr. Laxmi verma
Class- B.A -1
Subject- Micro Economics
Topic- Meaning & Definition of Economics
Unit-1
2. DEFINATION OF ECONOMICS
From the point of view of the convenience of the study we define the definition of
economics can be divided into five parts.
(1) Economics as a science of Wealth
(2) Economics as a science of material welfare.
(3) Economics as a science of scarcity.
(4) Economics as a science of wantlessness
(5)Growth oriented definition of economics
3. Economics as a science of Wealth
(1) Economics is a science of wealth
Adam Smith
(2) Economics is the science which treats of wealth
J.B. Say
(3) Economics is that body of Knowledge which relates to Wealth
F.A. Walker
4. Criticisms
(1) More Emphasis has been given to wealth
(2) Wealth is used in narrow Sense.
(3) Imagine of economic man
(4) The Scope of economics has become narrow.
(5) Complete Ignorance of economic behaviour of man
5. Economics as a science of material
welfare
‘’Economics is on the one side of Wealth; and on the other and more
important side, a part of the study of man’’
Marshall.
‘’ The range of an Inquiry becomes restricted to that part of the social
welfare that can be brought directly or indirectly into relation with the
measuring rod of money.
A.C. Pigou.
6. Features of Marshall’s definition
‘Economics’ new name is given.
Study of Human.
Study of social real and normal man.
Study of ordinary business of man.
Objective to increase material welfare.
Close relationship of economics with ethical values.
Economics is both science and art.
7. Criticisms
Illusory concept of ordinary business of life.
Economics is not a social science but human science.
The classification of human activities into economic &uneconomic
activities is not proper.
The classification of means into material and immaterial is not just.
Unscientific concept of welfare.
Marshall’s definition is classificatory not analytical.
Economics has no relation with ethics.
8. 3. Robbins’ Scarcity Definition:
“Economics is the science which studies human behaviour as a
relationship between ends and scarce means which have alternative uses.”
From this definition, one can build up the following propositions:
(i) Human wants are unlimited; wants multiply—luxuries become
necessities. There is no end of wants. If food were plentiful, if there
were enough capital in business, if there were abundant money
and time—there would not have been any scope for studying
economics. Had there been no wants there would not have been
any human activity. Prehistoric people had wants. Modern people
also have wants. Only wants change—and they are limitless.
9. (ii) The means or the resources to satisfy wants are scarce in relation to
their demands. Had resources been plentiful, there would not have been
any economic problems. Thus, scarcity of resources is the fundamental
economic problem to any society. Even an affluent society experiences
resource scarcity. Scarcity of resources gives rise to many ‘choice’
problems.
(iii) Since the prehistoric days one notices constant effort of satisfying
human wants through the scarcest resources which have alternative uses.
Land is scarce in relation to demand. However, this land may be put to
different alternative uses.
10. Criticisms
i. In his bid to raise economics to the status of a positive science, Robbins
deliberately downplayed the importance of economics as a social science.
Being a social science, economics must study social relations. His
definition places too much emphasis on ‘individual’ choice. Scarcity
problem, in the ultimate analysis, is the social problem—rather an
individual problem. Social problems give rise to social choice. Robbins
could not explain social problems as well as social choice.
ii. According to Robbins, the root of all economic problems is the scarcity
of resources, without having any human touch. Setting aside the question
of human welfare, Robbins committed a grave error.
11. iii. Robbins made economics neutral between ends. But economists cannot
remain neutral between ends. They must prescribe policies and make value
judgments as to what is good for the society and what is bad. So,
economics should pronounce both positive and normative statements.
iv. Economics, at the hands of Robbins, turned to be a mere price theory or
microeconomic theory. But other important aspects of economics like
national income and employment, banking system, taxation system, etc.,
had been ignored by Robbins.
12. (4) Economics as a science of wantlessness
“as a science which studies human behaviour as a means to the end of
want lessness”. Human behaviour is the subject matter of the science of
Economics. It is generally the result of a state of disequilibrium of human
mind.
13. 5)Growth oriented definition of economics
Samuelson defined Economics as follows:
“Economics is the study of how people 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 persons and groups of
society.”
14. Main features of Samuelson’s Definition
(i) Efficient Allocation of Resources:
There is a great deal of similarity between the approaches of Samuelson and Robbins. Both
have stressed the problem of scarcity of means in relation to unlimited ends.
(ii) Dynamism:
Samuelson has included dynamism in the definition of Economics by incorporating
the time element. The problem of growth has been included in the purview of the
definition.
(iii) Problem of Choice:
The greatest feature of Samuelsson definition is that if takes into account the problem of
choice in the dynamic framework of economics.
(iv) Improvement in Resource Allocation:
Economics analyse the costs and benefits of improving the pattern of resource allocation.
Improvement of resource allocation and better distributive justice are synonymous with
economic development.
(v) Distribution:
The modern definition also concerns itself with the distribution for the consumption among
various persons and group in a society.
