Many reporters of the early days defined economics as "a science of wealth". Adam Smith commonly know as the father of modern economics, defined economics as "An inquiry into the nature and causes of wealth of nations."
These definitions were deficient because theyave much importance to wealth. As wealth is not everything, it only leads to achieve care of human. Therefore it is man an which is the aim all of the economic activities.
Professor Dr. Alfred Marshall was the first economist who gave a logical definition of economics. He defined economics as: "A study of mankind in ordinary business of life, it examine that part of individual and social actions which is closely related with attainment and use of material requisites"
CHARACTERISTICS OF DEFINITION:
This definition gives a new direction to the study of economics. Following are the important characteristics of definition.
1. A Social Science
This Definition makes economics a social science. It is a subject that is concerned with the people living in society. According to Marshall, as the behavior of human beings is not the same all the time therefore principles of economics can not be formulated like the laws of sciences. Further laws of economics are not as exact as the laws of natural sciences. For this reason it is a social science.
2. Study Of Man
Economics is related to man; Therefore it is living subject. It discusses economic problems and behavior of man. According to Marshall it studies the behavior of man in ordinary business of life.
3. Wealth As A Means Of Material Well Being
According to Marshall, wealth is not the ultimate objective of human activities and therefore we do not study wealth, for the sake of wealth. Therefore according to this definition we study wealth as a source of attainment of material welfare.
4. Economics And Welfare
This definition makes economics a welfare oriented subject. We are concerned only with those economic activities which do not promote substance welfare of human beings are out of the scope of economics.
Marshal stresses up the concept of "material requisite of well being". Therefore according to this definition all economic activities resolve around the acquisition and use of material goods like food, clothing etc. Because they increase welfare of human beings. On the other hand non-material requisites of human life like education, recreation are ignored.
6. Normative Outlook
According to this definition economics should take care of good and bad aspects of economic activities and there is involve itself in "what should be and what should not be". This is called normative aspect of economics.
"Robbins and other many economists severely criticized this definition on following grounds."
1. Limited To Material Welfare
This definition limits the subject of economics to material welfare of people. But the subject of economics is not limited to the study of material welfare of human beings. In reality both material and non-material aspects of wellbeing are studies in economics.
2. Vague Concept of Welfare
The concept of welfare used in this definition is also not clear. The welfare of human beings is not limited to the attainment of material requisites. There are many other factors that affect the human welfare. Further the word "welfare" has different meaning for different persons and different societies. Therefore we can not define economics using an unclear concept of welfare.
3. Limited Scope
This definition has made the scope of economics limited. Only those activities are studied in economics which are aimed at the attainment of material requisites of well being. Further it ignores the economic activities of a person not living in society. Attainment of non material requisites of human well being fall out of the scope of economics. This division of material and non material aspects of human welfare is not correct.
4. Economics And Welfare
According to Robbins the study of economic activities on the basis of welfare is not good. It is not the duty of an economist to pass verify that what is conducive to welfare and what is not. Thus according to Robbins "Whatever Economics is concerned with, it is not concerned with causes of material welfare as such.
5. Moral Judgment
In this definition Marshall makes economics a subject which considers the right and wrong aspect of economic activities. According to Robbins economics in neutral as regards ends and it is not the function of an economist to pass moral judgments and say what is good and what is bad.
This definition appears to be unrealistic as we analyze it critically. The unclear concept of welfare, the division of ends into material and non material, the stress on good and bad, the concept of man living in society etc. All these concepts put unnecessary restrictions and make the scope of economics limited. These ideas make the definition unrealistic.
Although this definition has given a new direction to the subject of economics but it had many weaknesses. Some of the faults of definition are discussed above. For these reasons this definition was replaced by other new definitions of economics.