A Presentation on Definition of Economics Submitted by Surinder Pal Sukhija Associate Professor Department of Economics Post Graduate Government College Sector 11, Chandigarh

Definition of Economics

Definitions of Economics classified into three categories Wealth definitions Material Welfare definitions Scarcity definitions

Wealth- Definitions (Given by Classical economists) Adam Smith: Economics is an enquiry into the nature and causes of wealth of nations. J B Say: Economics is the science which treats of Wealth.

Features (Wealth definition) Economics is the study of wealth only Wealth means scarce material goods only Economics seeks to investigate causes that lead to increase in wealth Economics studies economic man who is aware of his self interest and makes efforts to achieve his selfish ends to the maximum

Criticism More emphasis on wealth Narrow meaning of wealth Concept of economic man Neglect of welfare Neglect of means to attain this Narrow subject matter (Main critics are Carlyle, Ruskin, Morris and Bailey)

Material Welfare definition ( Given by Neo Classical economists) Alfred Marshall: Economics is the 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 material requisites of well being. Penson: Economics is the science of material welfare.

Features (Material welfare definition) Importance to study of man Study of economic activities of social man Ordinary business of life Study of real man Material requisities Welfare Science and art Money is measure of material welfare

Criticism Meaning of ordinary business of life not clear Limited scope Welfare concept is uncertain Economics is a human science It is just classificatory and not analytical Economics is just a positive science ( Main critic: Lord Robbins)

Scarcity definition Lord Robbins: Economics is the science that studies human behavior as a relationship between ends and scare means which have alternative uses Scitovsky: Economics is a science concerned with administration of scarce resources

Features (Scarcity definition) Unlimited wants Limited means Alternative uses of means Wants differ in intensity Economic problem Opportunity cost

Criticism Ignores social aspect of economic activities Economics is not neutral as regards ends Very wide scope of economics Not only a positive science Scarcity is not the only cause of economic problem Study of static condition Complex and abstract

Conclusion Prof. Robbins gave economics the status of science. Lord Keynes: In economics, we study the administration scarce resources, and of the determinants of employment and income.

Modern economists: Economics now deals with creating a synthesis between unlimited wants and limited means while tackling the problems of income, output and employment.

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