Economics Definition History and Evolution

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which aspect of economics does Robbins' definition neglect according to critics?

Policy implications of economic theories

The study of market equilibrium

The normative aspect of economic life (correct)

The allocation of existing resources

What criticism is made regarding Robbins' treatment of ends and means?

He omits their interdependence in economic actions. (correct)

He defines them too closely to each other.

He assigns equal importance to both.

He completely separates them.

Why do some critics view Robbins' definition as ethically neutral?

It focuses solely on physical sciences.

It does not consider the implications of economic actions.

It fails to incorporate virtues and vices in economics. (correct)

It completely ignores human behavior.

In what way does Robbins' definition limit the study of economics?

By reducing economics to mere valuation theory. Signup and view all the answers

How does Robbins' definition fail to address macroeconomics?

It treats resources as static rather than growing. Signup and view all the answers

What important aspect of economics does Robbins' definition reportedly exclude according to Boulding?

Study of welfare. Signup and view all the answers

What do critics say Robbins fails to explain concerning his definition of ends?

The complexities of achieving ends. Signup and view all the answers

Robbins' definition primarily emphasizes which role of economics?

Allocative role of resources. Signup and view all the answers

Who is recognized as the father of modern economics?

Adam Smith Signup and view all the answers

What was the primary focus of the classical economists when defining economics?

Wealth Signup and view all the answers

According to early definitions of economics, what was considered wealth?

All goods and services produced Signup and view all the answers

Why were early definitions of economics criticized?

They focused solely on immense wealth. Signup and view all the answers

Which of the following terms describes the earlier perception of economics as a science of wealth?

Dismal science Signup and view all the answers

What shift did later economists introduce regarding the definition of economics?

From wealth to human welfare Signup and view all the answers

How did social reformers view the early definitions of economics?

They condemned it as lacking idealism. Signup and view all the answers

What was one consequence of defining economics solely in terms of wealth?

It was deemed as promoting selfishness. Signup and view all the answers

What is the primary focus of economics according to Alfred Marshall?

The study of human interaction and social action Signup and view all the answers

What does Alfred Marshall suggest is often overlooked in economics?

The relationship between man and wealth Signup and view all the answers

How does Marshall view the role of money in economics?

As a tool for measuring human motives Signup and view all the answers

Which aspect of human behavior is emphasized in the study of economics according to Marshall?

The actions of individuals as they interact in society Signup and view all the answers

What did older economists fail to clarify, according to Marshall?

The relationship between wealth and human welfare Signup and view all the answers

What is an important aspect of wealth in relation to raising people's standard of living, according to both Marshall and Pigou?

Wealth is secondary to human welfare and well-being Signup and view all the answers

In which perspective did Alfred Marshall suggest economists fail to study individuals?

As isolated beings without social influence Signup and view all the answers

What key term did Pigou introduce in his definition of economics that Marshall also emphasized?

Welfare Signup and view all the answers

What is the main criticism of Robbins' definition of economics according to the content?

It renders economics abstract and complex. Signup and view all the answers

According to Baxter and Rees, what does economics primarily focus on?

Social behavior and institutions involving scarce resources. Signup and view all the answers

What aspect of economics does J.M. Keynes emphasize in his definition?

The administration of scarce resources and the determinants of income. Signup and view all the answers

What does Milton H. Spencer highlight as significant in his definition of economics?

The choice of society in employing limited resources. Signup and view all the answers

Which definition recognizes the importance of economic growth in the study of economics?

Samuelson's definition. Signup and view all the answers

What does Henry Smith focus on in his definition of economics?

The redistribution of wealth and national productivity changes. Signup and view all the answers

How is the scarcity concept of economics perceived in the content?

It is impractical for addressing real-world economic issues. Signup and view all the answers

What does the content suggest about the utility of Robbins' definition of economics for the common man?

It fails to address the everyday economic issues faced by individuals. Signup and view all the answers

What aspect does Samuelson's definition of economics emphasize in relation to resources?

The problem of scarcity of resources in relation to unlimited wants Signup and view all the answers

How does Samuelson's view of economics differ from Robbins' view?

Samuelson considers economics a social science, whereas Robbins does not. Signup and view all the answers

What does Samuelson link to the growth aspects in economics?

The scarcity of productive resources Signup and view all the answers

Which of the following describes the applicability of Samuelson's definition?

It can be applied in both money and barter economies. Signup and view all the answers

What important time-related aspect does Samuelson include in his definition?

The reference to 'overtime', making economics dynamic Signup and view all the answers

What does Samuelson's definition state about consumption and distribution?

It integrates the issues of consumption, distribution, and production. Signup and view all the answers

How does Samuelson's definition contribute to the study of economics?

It emphasizes macro-economic growth and development. Signup and view all the answers

What limitations are mentioned regarding Samuelson's definition of economics?

It exclusively focuses on material welfare. Signup and view all the answers

Study Notes

Definition of Economics: A Historical Perspective

Modern economics is traced back to 1776 with Adam Smith's "An Enquiry into the Nature and Causes of the Wealth of Nations."
Early economists, including Adam Smith, defined economics as the "science of wealth." This perspective focused on the production and consumption of goods, including not just gold and silver, but houses, furniture, etc.
Critics argued that this definition was too limited, focusing solely on material wealth and neglecting human welfare.

Shifting Focus: Economics as a Science of Material Welfare

Alfred Marshall, a prominent British neo-classical economist, defined economics as "a study of mankind in the ordinary business of life."
He emphasized the importance of social action and the material requisites of well-being, recognizing that economics impacts people's daily lives and their access to resources.
Marshall understood that money is a tool for measuring human motives and that economics should study real people in their social context, not abstract "economic man."

Robbins' Scarcity Definition

Lionel Robbins proposed defining economics as "the science which studies human behavior as a relationship between ends and scarce means which have alternative uses."
This definition emphasized the central problem of scarcity: unlimited wants and limited resources, requiring rational choices and allocation of resources.
Robbins' definition was criticized for its abstract nature, ignoring the ethical and value-laden aspects of economic decisions.

Critiques of Robbins' Definition

The definition ignores the normative aspect of economics, focusing solely on "what is" rather than "what ought to be."
Robbins' concept of "ends" is considered artificial by some critics, lacking a clear explanation of its complexity.
The separation of ends from means becomes difficult, as immediate ends can be considered means for achieving further ends.
Robbins' assertion of ethical neutrality is challenged, as economists study human behavior, inherently connected to ethical considerations.
The definition reduces economics to a theory of valuation, neglecting other significant aspects of economic study.

Other Definitions

Baxter and Rees define economics as a science that examines the use of scarce resources to produce and distribute goods and services to meet human wants.
Benham describes economics as the study of factors influencing a country's national income.
J.M. Keynes defines economics as the study of resource allocation, income, and employment, including economic fluctuations and stability.
Milton H. Spencer defines economics as a societal choice process for utilizing limited resources with alternative uses to produce goods and services.
Henry Smith defines economics as the study of how individuals obtain a share of societal production and how the total output of society changes.

The Growth-Oriented Definition: Samuelson

Paul Samuelson's definition emphasizes that "economics is the study of how men and society choose...to employ scarce productive resources...to produce various commodities overtime...and distribute them for consumption...amongst various people."
This definition encompasses both scarcity and choice, production and consumption, as well as the time element of economic growth.

Features of Samuelson's Definition

Samuelson recognizes scarcity and alternative uses of resources, like Robbins.
He emphasizes economics as a social science, studying collective societal decisions and the use of resources.
Samuelson incorporates the time element, making economics dynamic and acknowledging the importance of economic growth.
His definition applies to both money-based and barter economies.
The definition highlights the importance of consumption and distribution alongside production.
Samuelson emphasizes the use of cost-benefit analysis for evaluating development programs.

Limitations of Samuelson's Definition

Samuelson's definition, despite its comprehensiveness, is still criticized for focusing solely on material welfare and not fully accounting for broader social, political, and environmental factors.
Modern economics has moved beyond simple material welfare and incorporates broader concepts like the Physical Quality of Life Index (PQLI) and Human Development Index (HDI) to measure economic development.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Explore the historical journey of economics, tracing its roots from Adam Smith's definitions to Alfred Marshall's broader perspective. This quiz delves into the evolution of economics as a study of wealth and material welfare, reflecting its impact on human life and social action.