Answers

2016-06-28T20:38:11+08:00
1. Adam Smith's Definition
Adam Smith, considered to be the founding father of modern Economics, defined Economics as
the study of the nature and causes of nations' wealth or simply as the study of wealth.
The central point in Smith's definition is wealth creation. Implicitly, Smith identified
wealth with welfare. He assumed that, the wealthier a nation becomes the happier are its
citizens. Thus, it is important to find out, how a nation can be wealthy. Economics is the
subject that tells us how to make a nation wealthy. Adam Smith's definition is a wealth-centred
definition of Economics.
2. Alfred Marshall's Definition
Alfred Marshall also stressed the importance of wealth. But he also emphasised the role of the
individual in the creation and the use of wealth. He wrote: "Economics is a study of man in
the ordinary business of life. It enquires how he gets his income and how he uses it. Thus, it is
on the one side, the study of wealth and on the other and more important side, a part of the
study of man". Marshall, therefore, stressed the supreme importance of man in the economic
system. Marshall's definition is considered to be material-welfare centred definition of
Economics.
3. Lionel Robbins' Definition
The next important definition of Economics was due to Prof. Lionel Robbins. In his book
'Essays on the Nature and Significance of the Economic Science', published in 1932, Robbins gave a
definition which has become one of the most popular definitions of Economics. According to
Robbins, "Economics is a science which studies human behaviour as a relationship between
ends and scarce means which have alternative uses". A long line of economists after Robbins,
including Scitovsky and Cassel agreed with this definition and carried on their analysis in
line with this definition. It is a scarcity-based definition of Economics.
4. Modern Growth-Oriented Definition of Samuelson
In relatively recent times, more comprehensive definitions of Economics have been offered.
Thus, Professor Samuelson writes, "Economics is the study of how people and society end up
choosing, with or without the use of money, to employ scarce productive resources that could
have alternative uses to produce various commodities over time and distributing them for
consumption, now or in the future, among various persons or groups in society. It analyses
costs and benefits of improving patterns of resource allocation". A large number of modern
economists subscribe to this broad definition of Economics.
5. Gary Becker, a contributor to the expansion of economics into new areas, describes the approach he favors as "combin[ing the] assumptions of maximizing behavior, stable preferences, and market equilibrium, used relentlessly and unflinchingly."[23] One commentary characterizes the remark as making economics an approach rather than a subject matter but with great specificity as to the "choice process and the type of social interaction that [such] analysis involves." The same source reviews a range of definitions included in principles of economics textbooks and concludes that the lack of agreement need not affect the subject-matter that the texts treat. Among economists more generally, it argues that a particular definition presented may reflect the direction toward which the author believes economics is evolving, or should evolve.[24]
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