Definition of Economics by Alfred Marshall Neoclassical Economist
Welfare definition of Economics by Alfred Marshall (1842-1924) led the Neo-classical school. Alfred Marshall gave economics a respectable place among other social sciences. In his book “Principles of Economics” published in 1890, has defined economics in these terms, “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 use of material requisites of well being”. This definition of economics by Alfred Marshall neoclassical economist clearly point out that economics is on the one side a study of wealth and on the other and more important side a part of study of man.
According to William Henry Beveridge, Economics is the study of general methods by which men cooperate to meet their material needs. Other neoclassical economist also defined economics as a study of material welfare and support Alfred Marshall.
For example, Canon says that “the aim of political economy is the explanation of the general causes on which the material welfare of human beings depends”.
Major Points of Definition of Economics by Alfred Marshall
However these economists were of the opinion that the aim of economics is to study human activities which are conducive to human welfare in its material aspect.
From the welfare definition of economics by Alfred Marshall, we see that he lays emphasizes on the below points or merits:
- Study of an Ordinary Man
- Economics is not a Useless Study of Wealth
- Economics is a Social Science
- Study of Material Welfare
1. Study of an Ordinary Man
According to Alfred Marshall, economics is the study of an ordinary man who lives in society. It is not concerned with the lives of only rich persons or who is cut away from the society. Its subject matter is a particular aspect of human behavior i.e. earning and spending of incomes for the normal material needs of human beings.
2. Economics is not a Useless Study of Wealth
Economics does not regard wealth as the be-all and end-all of economics activities wealth is not of primary importance. It is earned only for promoting human welfare economics is studied to analyze the causes of material prosperity of individuals and nations.
3. Economics is a Social Science
It does not study the behavior of isolated individuals but the actions of persons living in society. When people live together they interact and cooperate to work at firms, factories, shop and offices to produce and exchange goods or services. The problems about these activities are studied in economics.
4. Study of Material Welfare
According to Alfred Marshall, economics studies only material requisites of well being or causes of material welfare. It is cleared from this definition that it is materialistic aspect and ignores non-material aspects. Alfred Marshall stressed that the man’s behavior and activities to produce and consume maximum number of goods and services are the main object of study wealth is not an end or final aim, but only a means to achieve a higher objective of welfare.
Criticism on Welfare Definition of Economics by Alfred Marshall
In 1931, Lionel Robbins published his book “Nature and Significance of Economics Science”, following are the grounds of his criticism of neoclassical economics definition by dr. Alfred.
- Narrow Down the Scope of Economics
- Classificatory Type of Definition
- Relation between Economics and Welfare
- Welfare is a Vague Concept
- Involves Value Judgment
1. Narrow Down the Scope of Economics
According to Prof. Lionel Robbins the use of the word “Material” in Marshall’s definition narrows down the scope of economics. There are many things in the world, which are non material but they are very significant for promoting human welfare.
For example the services of doctors, lawyers, teachers, engineers, professors etc. these thing satisfy our wants and are scarce in supply. If we exclude these services from the economics, then its cope will be very much restricted. Therefore, in the actual study of economics principles, both the material and immaterial things are taken into accounts.
2. Classificatory Type of Definition
Marshall’s definition was rejected by Robins as being classificatory because it makes a distinction between material and immaterial welfare and says that economic is concerned only with material welfare.
3. Relation between Economics and Welfare
Robbins hardly criticized Marshall’s definition due to the reason of the relation between economics and welfare. Robins said that there are many activities which do not promote human welfare but they can satisfy their wants and therefore, can be regarded economic activities, for example the manufacturing and sale of alcohol goods or opium etc. here Robins says “whey talk of welfare at all? Why not throw away the mask along altogether?”
4. Welfare is a Vague Concept
Professor Robins raised another objection about “Welfare”. In Robbins opinion, welfare is a vague concept. It is purely subjective. It differs from man to man, from place to place and from age to age. Robins says that what is the use of a concept which cannot be quantitatively measured and on which two persons cannot agree as to what is conducive to welfare and what is not.
5. Involves Value Judgment
Robins object that the word “Welfare” involves value judgment. According to Robbins the work of the economists is not to judge the value of a commodity whether it promotes welfare or not. Economists are forbidden to pass any decision.
The definition of economics by Alfred Marshall is of theoretical nature. Alfred Marshall definition of economics is not possible in practice to divide human activities.