Many writers of the early days defined economics as “a science of wealth”. Adam Smith commonly know as the father of modern economics, defined economics as “An enquiry into the nature and causes of wealth of nations.”
These definitions were defective because they gave much importance to wealth. As wealth is not everything, it only leads to achieve welfare of human. Therefore it is man an which is the aim all of the economic activities.
Professor Dr. Alfred Marshall was the first economist who gave a logical definition of economics. He defined economics as: “A study of mankind in ordinary business of life, it examine that part of individual and social actions which is closely related with attainment and use of material requisites”
CHARACTERISTICS OF DEFINITION:
This definition gave a new direction to the study of economics. Following are the important characteristics of definition.
1. A Social Science
This Definition makes economics a social science. It is a subject that is concerned with the people living in society. According to Marshall, as the behavior of human beings is not same all the time therefore principles of economics cannot be formulated like the laws of sciences. Further laws of economics are not as exact as the laws of natural sciences. For this reason it is a social science.
2. Study Of Man
Economics is related to man; therefore it is living subject. It discusses economic problems and behavior of man. According to Marshall it studies the behavior of man In ordinary business of life.
3. Wealth As A Means Of Material Well Being
According to Marshall, wealth is not the ultimate objective of human activities and therefore we do not study wealth, for the sake of wealth. Therefore according to this definition we study wealth as a source of attainment of material welfare.
4. Economics And Welfare
This definition makes economics a welfare oriented subject. We are concerned only with those economic activities which do not promote material welfare of human beings are out of the scope of economics.
Marshal stresses upon the concept of “material requisite of well being”. Therefore according to this definition all economic activities resolve around the acquisition and use of material goods like food, clothing etc. because they increase welfare of human beings. On the other hand non-material requisites of human life like education, recreation are ignored.
6. Normative Outlook
According to this definition economics should take care of good and bad aspects of economic activities and therefore involve itself in “what should be and what should not be”. This is called normative aspect of economics. » Read more: Nature and Scope of Economics