Definition of Economics By Adam Smith
DEFINITION OF ECONOMICS BY ADAM SMITH:
There is no one definition of Economics which
has a general acceptance. The formal roots of the scientific framework of
economics can be traced back to classical economists. The pioneers of the
science of economics defined economics as the science of wealth.
Adam Smith (1723 -1790), the founder of
economics, described it as a body of knowledge which relates to wealth.
Accordingly to him if a nation has larger amount of wealth, it can help in
achieving its betterment. He defined economics as:
Adam Smith in his famous book, “An Enquiry into the
Nature and Causes of the Wealth of Nations” emphasized the production
and expansion of wealth as the subject matter of economics.
Ricardo, another British classical economist
shifted the emphasis from production of wealth to the distribution of wealth in
the study of economics.
J.B. Say, a French classical
economist, described economics as:
“The science which treats of wealth”.
J.S. Mill in the middle of 19th century
looked upon economics is as:
"Practical science of production and distribution of
wealth”.
According to Malthus:
“Man is motivated by self Interest only. The desire to
collect wealth never leaves him till he goes into the grave”.
The main points of the definitions of economics given
by the above classical economists are that:
(i) Economics is the study of wealth only. It deals with
consumption, production, exchange and distribution aspects of wealth.
(ii) Only those commodities which are scarce are
Included In wealth. Non-material goods such as air, services etc., are excluded
from the category of wealth.
CRITICISM ON THE CLASSICAL DEFINITION OF ECONOMICS:
The definitions given by Adam Smith and other classical
economists were severely criticized by social reformers and men of letters of
that time Ruskin and Carlyle. They dubbed economics as a ‘dismal science’ and a
'science of getting rich'. The main criticisms on these definitions are as
under:
(i) Too much importance to wealth: The
definitions of economics give primary importance to wealth and secondary
importance to man. The fact is that the study of man is more importance than
the study of wealth.
(ii) Narrow meaning of wealth: The word ‘wealth’
in the classical economist’s definitions of economics means only material goods
such as chair, book, pen, etc. These do not include services of doctors,
nurses, soldiers etc. In modern economics, the word ‘wealth’ includes
material as well as non-material goods.
(iii) Concept of economic man: According to
wealth definitions, man works only for his self-interest Social interest is
ignored. Dr. Marshall and his followers were of the view that economics does
not study a selfish man but a common man.
(iv) No mention of man’s welfare: The 'Wealth'
definitions ignore the importance of man’s welfare. Wealth is not be all and
the end all of all human activities.
(v) It does not study means: The definitions of
economics lay emphasis on the earning of wealth as an end in itself. They
ignore the means which are scare for the earning of wealth.
(vi) Defective logic: The definitions economics
given by classical economists were unduly criticized by the literacy writers of
that time. The fact is that what Adam Smith wrote in his book ‘Wealth of
Nations' (1776) still holds well. The central argument of the book
that market economy enables every individual to contribute his maximum to the
production of wealth of nation still not only holds good but is also being
practiced and advocated throughout the capitalistic world. Since the word
'wealth' did not have clear meaning, therefore the definitioneconomics became
controversial. It was regarded unscientific and narrow. At the end of 19th
century, Dr. Alfred Marshall gave his own definition of economics and therein
he laid emphasis on man and his welfare.
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