Definitions of Economics

Wealth Definition

“Adam Smith, the father of modem Economics, in his book entitled 'An Enquiry into the Nature and Causes of the Wealth of Nations’ defined Economics as a study of wealth.

Smith considered the acquisition of wealth as the main objective of human activity. According to him the subject matter of Economics is the study of how wealth is produced and consumed. Smith's definition is known as wealth definition.

Welfare Definition

It was Alfred Marshall who rescued the economics from the above criticisms. By his classic work “Principles of Economics”, published in 1890, he shifted the emphasis from wealth to human welfare. According to him wealth is simply a means to an end in all activities, the end being human welfare. He adds, that economics “is on the one side a study of the wealth; and the other and more important side, a part of the study of man”. Marshall gave primary importance to man and secondary importance to wealth.

Scarcity Definition

`Lionel Charles Robbins (1898 – 1984) defined Economics as – a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.

Key features of Scarcity Definition:

i) It recognized that Economics is a science deals with the economic behaviours of human being.

ii) It also assessed that all the physical and non-physical resources have associated with scarcity.

iii) The resources have multiple utility and it can only be used either for one purpose or another. The use of most of the resources are mutually-exclusive.

iv) There is a need of efficient use of scarce resources, and primary objective of Economics is to ensure efficiency in use of resources with a purpose to satisfy human wants.

Growth Definition

Paul Samuelson (1915 – 2009) defined Economics as - the study of how man and society choose with or without the use of money to employ the scarce productive resources, which have alternative uses, to produce various commodities over time and distributing them for consumption, how or in the future among various person or groups in society.

Key features of Growth Definition:

i) It deals with allocation of scarce resource to be used in productive purposes.

ii) The selection of most efficient use of the resources from the alternative ways.

iii) The growth of economies will depend upon the consumption and production in the economy.

iv) This definition also points towards Economics as a study of economic system.

Reference:

ICSI

Shivaji University

LPU

Calicut University

Rai University

Pondicherry University