Meaning Of Economics
Before 17th
century there was no economics, no one even could have defined the economics
because it is growing very rapidly as the year passes, the new ideas are being
discovered and the old theories are being revised, therefore the people thought
it is useless and difficult science. It is not possible to give a definition of
economics, for the sake of convenience , the set of definition given by various
economics are generally classified as under;
a) Economics as a science of wealth.
b) Economics as a science of scarcity
and choice.
v Criticisms Of Economics Are Examine
In Detail
He divided
his book into four departments, for example; consumption production, exchange
and distribution of wealth. He called the science of wealth.
·
Production
Of Wealth: This explains as to how goods and services are produced by combining
the four factors of productions.
·
Exchange
Of Wealth: Every producer exchanges his surplus, goods and services with the
surplus, goods produced by others in a barter economy. This process of wealth
enables everyone to satisfy his multiple wants. Everyone individuals or class
gets his share from the national income during a one year.
·
Consumption
Of Wealth: When we use goods and services to satisfy our wants it is called
consumption of wealth.
Criticism
Ø No Mention Of Man’s Welfare: This
“wealth” definition ignore the importance of man’s welfare because wealth is
not the end of human activities.
Ø Narrow Meaning Of Wealth: They shows
wealth as a economics of material goods, chair, book, pen etc. These do not
include the services of a doctor, professors, soldiers etc.
v The Marshal’s Definition And
Criticize On It
New-Classical
School Of Thoughts; The founder of new-classical school of thought Dr. Alfred Marshal
defined economics in his famous book “Principal of Economics” which he wrote in
1922.
Main Points:
The main points of this definition are as follow;
1) Economics is interested in human
welfare and not in wealth.
2) It is a social science.
3) Economics is concerned with the ways
in which a man works on natural resources for the satisfaction of material
wants.
“MERITS”
1. Study Of Human Life: According to the
definition society economics studies the human life.
2. Importance Of Society: According to
the definition society has been given much importance and all those people who
earn and consume wealth have been discussed.
3. An Ordinary Man Discussed: Those
people who do not perform social activities like saints and mad will not be
studied in economics. Only an ordinary man will be discussed.
4. Importance Of Welfare: Marshall
stresses on individual and collective welfare. This definition cluster round
the welfare.
5. Un-Equal Distribution Of Wealth
Problem: Prof. Marshall also discussed to solve the problem of un-equal
distribution of wealth.
6. Importance To Man: In this definition
man has given primary importance and wealth is used for the prosperity of man.
7. Explain Theory Of Wealth: For a long time this definition was accepted but in 1930 Robbins criticized it on the following grounds.
“DEMERITS”
1) Narrow Scope: According to this
definition, economics is concerned only with these activities which promote
only material welfare and it has un-necessary narrowed the scope of economics.
2) Non-Material Services Ignored: It
ignores the non-material services like the services of teacher which has an
important contribution to economics welfare.
3) Not Clear: The difference made in
this definition between ordinary business of life and extra ordinary business
of life is not clear.
4) Society Is Discussed Only: According
to this definition, economics deals with persons living only is society. It
ignores others who may also have economic problem.
5) Concept Of Welfare Differs: There is
no immunity about the concept of welfare. Ideas about welfare vary from time to
time, place to place and person to person.
6) Un-Measurable Concept: The
measurement of welfare is not possible. One person cannot explain that how much
quantity of welfare he has received after spending Rs.15 on the cinema ticket.
7) Limited Concept Of Wealth
Consumption: Man spends his income on two kinds of necessities. Some are
materialistic while the others are non-materialistic and these both are
important. Although we spend A large part of our income on non-materialistic
necessities like education, health, refreshment etc.
8) Impartial: The last one objection is that Marshall’s definition is theoretical nature. It is not possible to divide men activities in two parts one is material activity and another is non-material activity.
Critical Examine The Robbins Definition
In 1934 after the criticism of Marshall’s definition.
“MAIN POINTS”
- Unlimited Wants: Human wants are unlimited. It is not possible to find a person who may say that his wants have been completely satisfied.
- Limited Means: Our means and sources are limited wants. If all the things were freely available then there would be no economics problem.
- Important And Less Important Wants: Some wants are more important while others are less important. If we will choose one desire to fulfill then we will have to sacrifice the other one.
Means have Alternative Uses: The scare resources have alternative uses.
“MERITS”
- Wider Scope: According to this definition economics has much wider content takes into account all types of human wants, material or non-material, as well as all types of persons living in society.
- Scientific Science: This definition of economics is more scientific and comprehensive as compared with the other definitions of economics.
- Universal: Because scarcity problem is felt by every body at every time and at every place.
- No Charge Of Sordidness: Now no charge of preaching memoriam can be leveled against it.
- No Responsibility Of Selecting Ends: It takes no responsibility for selecting ends. These maybe good or bad. Economics is not concerned with it.
“DEMERITS”
1) Not A Pure Science: Robbins
definition makes economics pure science like physics and chemistry while in
reality it is not true economics is related with the behavior of a man.
2) Only A Valuation Theory: It is
objected that Robbins has reduced economics
merely to a theory of value but it is more than value theory.
3) Human Love Missing: Human love is
entirely missing in Robbins definition of economics.
4) Ignores Macro Aspect: Robbins
definition has ignored macro aspect which is the important part of economics.
5) No Normative Aspect: According to
Robbins economics has no normative aspect while it is not correct. Economist has also the duty
to give his opinion about the matters.
6) Much Wider Scope: It covers the whole
of human life. According to this definition if you want to choose between the worship of God and that of
riches, it will be an economic problem.
7) Unlimited Labor: According to
Robbins all type of resources are limited.