a) Wealth definition
Adam smith and his disciples J.B. Say, Walker, J.S. Mill defined economics as an inquiry into the nature and courses of wealth of nations. Such a definition has been criticized as follows.
(i) The definition is very selfish: it restricts economics to the study of wealth alone. The definition does not state clearly how man comes into the study.
(ii) Since economics is defined in terms of material commodity, it doesn’t consider service e.g. services offered by doctors, teachers, etc.
b) Material welfare definition of economics
Alfred Marshall and his disciples, Pigou and Cannon defined economics as the study of man’s activities in the ordinary business of life. It tries to study how man acquires and uses his resources aimed at improving the welfare of mankind. In this definition, it can be noted that on the one hand, economics is the study of wealth and on the other hand, and more important, a study of man.
Criticism of the definition
(i) The definition excludes the study of services, that is, it only takes human material welfare.
(ii) Speaks of study of man’s activities during ordinary business of life. The question remains, how about during extra ordinary business life?
c) Scarcity definition of economics
Leonel Robbin (1933) improved upon the above definition and explained economics as the study of human behavior (as a relationship between scarce resources which have alternative uses)
The definition has characteristics that are currently addressed in economics namely
- Limited/scarce resources
- Alternative uses
- Unlimited wants
1. Scarcity: when we say that a resource is scarce, it means that it is there but cannot meet the demand. The scarce productive resource would include, land, labor, capital, entrepreneurship, and by extension technology used in the production process.
2. Alternative uses: some resources may be having more than one use. For example milk can make butter, cheese, chocolate etc.
3. Unlimited wants: human needs are unlimited and they are recurrent in that when you satisfy a need today, the same need has to be satisfied tomorrow. They are also competitive in that they compete for the limited resources.
NOTE:
Based on the above definition, economists today agree on a general working definition of the discipline. They conclusively define economics as the study of how man can use his scarce resources to satisfy his needs.
Wilfykil answered the question on March 6, 2019 at 05:26