Alfred Marshall's definition Of Economics

Alfred Marshall- 18th Century economics

Because of the classical definition and criticism a lot of misconceptions were created. Which badly effect the development of economics? Nobody had the courage to define economics because of the fear of that kind of criticism to which Adam smith was faced.

A British economist Alfred Marshall wrote a book in 1798 "Principles of economics" at this stage. He tried to remove the misconception and put economics on the road of development.

1.  Alfred Marshall's Definition

"Economics is the study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected and social action which is most closely connected with the attainment and use of the material requests of wellbeing."

Marshall the founder of neo-classical school of thoughts or welfare school of economics and his followers are of the view that on the one hand economics is the study of wealth and on the other hand it is the study of man who is more important than wealth. Further they are of the view that materials welfare is the primary aim of economics. So economics is the study of material welfare.

To elaborate Marshall's definition we discuss the main points:-

  1. 1.1. Study Of An Ordinary Man

    According to Marshall Economics does study of an ordinary man who lives in society is not the subject of study of economics.

  2. 1.2. Wealth Is Not The Be All And End All Of All Human Activity

    Economics does not regard wealth the be all and the end all of the human activity. Wealth is only a mean to the fulfillment of an end which is human welfare, so welfare and not wealth is, therefore of primary importance to man.

  3. 1.3. Study of all Activity of Men

    It does not study all activities of men people perform different activates while living in a society. There are different subjects to cover different activities i.e. Sociology for social activities, political science of political activities, physical education for sports activities. etc. but economics deals with the economic activities of human beings living in a society.

  4. 1.4. Study of Material Welfare

    economics only studies the ways in which man applies his knowledge and skill to the gift of nature for the satisfaction of this material welfare and ignores non-material aspects. According to Marshall's economics is the study of material welfare. He says each man applies his knowledge, uses his skill for the satisfaction of his material welfare and economics has nothing with immaterial thing.

    1.4.1. Exception:- 3

    Economics does not study all activities of men. It studies the activity of a man which is an economics activity of human beings living in a society.

    1.4.2. Exception 4:-

    Economics only studies the material welfare. According to Marshall economics is the study of material welfare. He says each man applies his knowledge, uses his skill for the satisfaction of his material welfare and economics has nothing with immaterial thing.

    2. Criticism

    1. 2.1. Narrow Down The Scope Of Economics

      According to Robbins when Marshall used the word "Material" in his definition considerably narrows down the scope of economics. There are many things in the world which are immaterial, but they are useful for promoting human welfare. i.e. the services of a doctor teacher, lawyer etc. which satisfy our wants and scarce in number (supply). If we exclude these services and include only material goods then the sphere of economics study will be very much restricted.

    2. 2.2. Relation Between Economics and welfare

      The second objection by Robbins is on the establishment of relation between economics and welfare. He says there are many activities which do not promote human welfare, but they are regarded economic activities (e.g.) the production and sale of alcohol goods or opium, so he says we talk of welfare at all.

    3. 2.3. Welfare Is A Vague Concept

      The third objection is an welfare. He says welfare is vague concept. It is purely subjective. It varies from man to man, from place to place and from age to age. Robbins says what is the need of the use of such concept which cannot be measured quantitatively and on which two persons cannot agree as what is conductive to welfare and what is not.

    4. 2.4. It Involves Value Judgment

      In this definition the word welfare involves value judgment (what is good and what is bad). According to Robbins, economists are forbidden to pass any judgment.

    5. 2.5. Impractical

      Marshall's definition is theoretical in nature. It is not possible in practice to divide man's activities in to material and non-material.

    2.5.1. Exception :-

    Robbins says Marshall's definition is theoretical, it is not practically applicable because he has divided man's activity into material and immaterial.

    3. Similar Posts

  5. Robbin's Definition of Economics
  6. Introduction to Economics
  7. Scope of Economics
  8. Keynes Theory of income & Employment