ALFRED MARSHALL’S DEFINITION OF
ECONOMICS
Marshall is a well-known economist. He was behind Smith and for him all
the way, approximantely hundred twenty years after Smith’s book on Economics.
Alfred Marshall wrote a book in Cambridge which was entitled “PRINCIPALES OF
ECONOMICS”.
In this book, Marshall defined Economics as an instrument to
remove the doubts of the people regarding the subject.
Marshall
stated , “Economics is the study of
mankind in the ordinary business of life; it examines that part of individual
and social Action which is most is closely connected with the attainment and
use of the material requisites of well-being”
From the definition, we able to achieve three main points:
(i) Ordinary business of life or Economics as a social
science.
(ii) Attainment and use of material requisites or production
and consumption of wealth.
(iii) Well-being or welfare of the society.
(i) ORDINARY
BUSINESS OF LIFE OR ECONOMICS AS A SOCIAL SCIENCE:
According
to Marshall, Economics is studies the economic behavior of the people living in
the society. Economic activities of the people outside the society are not,
therefore, considered in the study of economics. Hence Economics does not study
the isolated individuals or any “Robinson Crusoe”. By thie he show that
economics is asocial science.
(ii)
ATTAINMENT AND USE OF MATERIAL REQUISITES OR PRODUCTION AND CONSUMPTION OF
WEALTH:
In the ordinary business of life,
human beings perform different types of activities such as political activities
, sports, economic activities , moral and religious activities, of all these
activities of ordinary life, Economics Studies only those activities which are
related with the attainment and use of material
requisites or in other words, the production and consumption of wealth.
So far he is of the same view as that of Adam smith that Economics is a science
of wealth.
(iii) WELL
BEING OR WELFARE OF THE SOCIETY:
According to Marshall, the objective of the
study of Economics is to promote the material welfare of the people, to
Marshall. Economics focusses on only material aspects of life and therefore
studies material requisites well-being. Hence, according to him economics does
not regard wealth to be the goal of all human activities. Instead, it is only a
mean to achieve an end and that end is the economic welfare of the people or
the raising up of the standard of living of the people, Particularly of the
poor, So that they may lead a better economic life.
CRITICISM ON MARSHALL’S DDFINITION
In 1931,
another economists, Loinel Robbins, wrote a book entitled “NATURE AND SIGNIFICANCE OF ECONOMIC SCIENCE” In this book he
criticized Marshall on the following grounds,
(1) THE DEFINITION
NAROWS THE SCOPE OF ECONOMICS: The use of the word “Material” by Marshall narrows the scope of economics
as well need both the material and non-material requisites of life i.e. goods
and services.
The need for non-material requisites
is certainly over-whelming , Examples of the nonmaterial requisites are the
service of lawyers , teachers and doctors etc, these non-material requisites
satisfy our wants in the same way as material requisites (or goods) and if we
exclude them from the study of economics, the scope of economics would
certainly be restricted.
(2) WELL BEING IS A NONMEASURABLE
CONCEPT: True enough in its meaning one cannot
measure “wellbeing”. It is something
that cannot be estimated to figures , although it can be stated in theories.
Thus, according to Robbins, well-being cannot be measured as stated by
Marshall.
(3) ECONOMICS SHOULD NOT PASS VALUE JUDGEMENT: According to Robbins, Economics
should emphasize only on human and their satisfaction and, therefore it is not
concerned with whether these wants are being satisfied buy good things or bad
things. For example, human beings needs food clothing and shelter and they are
essentially required to be provided, but as far as wants for alcoholic drinks,
cigarettes and gambling are concerned, they are also required to be satisfied
according to Robbins as people are ready to pay for them disregarding the welfare aspect of these
things, thus what Robbins is trying, is “just
satisfy wants and don’t bother whether they are for the better or the worse”
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