Physical sciences like Physics, Chemistry and the like are concerned with the study of natural objects in their manifold aspects. Social science primarily deal with human activities in the society. They concern themselves with the study of different aspects of human behavior.
Economics, being a social science, is first and foremost a study of human behavior. Human behavior is the result of various influences acting on man in the society. It is the product of social forces.
As such, our behaviour has innumerable aspects, depending upon the motives and impulses to which we are subject at any given time. The social forces acting on a human being when he visits the cinema are not the same as those which govern his conduct when he goes to the college.
A comprehensive study of human behaviour in all its aspects in a single subject is impossible since the forces influencing it are many. This gives rise to the necessity of specialized study in the sphere of social sciences or study of human behaviour.
Now the question is : what aspect of human behaviour is the subject-matter of economics? The answer to this question leads us to the definition of economics.
Is Economics The Science of Wealth ?
The first book on economics was written by Adam Smith of Scotland. That is why he is called the father of economics. he named his book as ” An Enquiry into the Nature and Causes of the Wealth of Nations” (1776). It is clear from the title of his book thet Adam Smith was in favour of defining economics as the science of wealth. J.S. Mill considered economics as ” the practical science of the production and distribution of wealth”.
This definition is not acceptable for two reasons. In the first place, the word “wealth” is used in a special sense in economics. It refers to those things having the characteristics of utility, scarcity and transferability. But this is not the sense in which the term is used in ordinary language. To the common man, “wealth” means “riches”. A wealthy man is one who has a large amount of money.
When economics is defined as the science of wealth, it gives the impression of a science concerned with the mean things of life. It appears to be a subject which teaches mankind how to become rich by selfish means. But, in reality, it is not so. Economics does not in actual fact teaches us the way of getting rich quickly.
Such a definition created in the past a misunderstanding of our subject in the minds of writers like Carlyle and Ruskin. They criticized economics as the “Gospel of Mammon”. They preached that we are worshiping goddess of wealth. They condemned our subject as a “dismal science”. They accused economics of selfishness and meanness. This definition was, therefore , rejected in order to remove wrong impression from the minds of others.
Secondly, the definition of economics as the science of wealth put emphasis on the wrong place. Wealth is really meant for man or human welfare. Our aim is to maximize human welfare. This can be brought about by the maximization of satisfactions. Our interest in human welfare leads us to study the want-satisfying human activities. This aspect of our study is completely ignored when we define economics as the science of wealth. This definition does not pay attention to man for whom wealth is really meant.
On account of these reasons, this definition has been rejected. No longer economics is defined as the science of wealth. In the definition of economics given by modern writers, man or human activity occupies the primary and wealth only a second place.
Alfred Marshall in his book “Principles of Economics” (1890), defines economics as a study of man’s activities in the ordinary business of life. He points out “Political Economy or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of wellbeing”.
Marshall again points out that economics is ” on the one side a study of wealth, and on the other, and more important side a part of the study of Man”.”
An analysis of the above definition of Marshall would show that, in economics, we study the following things :
- It is a study of human activities.
- It does not study all types of human activities but only a part of those activities related to material welfare. Obviously such activities are related to income-earning and income-spending.
- It studies human welfare. It is not a study of the whole of human welfare, but only a part of it, namely, material welfare. Hence, this definition is called as the “welfare definition”.
The welfare-definition has been severely criticized by Lionel Robbins. He levels his objections to this definition on the following grounds: