There are two definitions given by Marshall. The first definition correct the mistakes of Adam Smith and second definition gives marshalls own view.
First definition, “Economics on one side is the study of wealth and on the other which is more important a part of the study of man.”
This definition has corrected the Adam Smith. Marshall regards ‘man’ to be more important than ‘wealth’. Wealth is for men and not man for wealth.
There is another point: We do not study all aspects of man activities, we study only economic activities in economics. Non economic activities are studied in other Sciences. Therefore, there are others science subjects like political science, sociology, psychology and moral science.
Second definition, “Economics is a study of mankind in the ordinary business of life. It examines that part of the individual and social action which is more closely connected with the attainment and with the use of material requisites of well being.” There are several important points of the definition:
- First, economics studies only ‘ordinary’ persons it does not study the activities of person who are not ‘economic man’ that is who do not try to maximize their gains.
- Second, according to Marshall, we study in Economics all those economic activities which ‘increases material welfare’.
- Third, the aim of Economics is to promote welfare. It is not a neutral science. It is a normative science. Economist have to work for promoting welfare. However, illegal and immoral activities which makes people and wealth and material objects are not economic because they do not promote welfare.
Criticism of the definition given by Marshall:-
The definition of economics, As given by Marshall, was severely criticized by Robbins who wrote a complete book on definition and nature of Economics. Robbins made the following criticism of the definition of economics given by Marshall:
- Robbins says it is incorrect to say that economics studies only those economic activities which promote material welfare. If we regard economics as the science which studies material welfare, we will be excluding many persons whose economic activities we will not be studying. There are millions of people who produced service and not good like teachers, singer judges or painters. Robin says we study in Economics all those activities for which there is demand and of which supplies Limited. Anything which commands price is to be studied in economics.
- Economics is not concerned with material welfare. Robbins says economics has to study even walk. What does not promote material welfare; that it is not possible to win a war an economist suggest how to me the cost of War.
- There are many goods which do not promote welfare for the increase material production. Production of wine and other opiates does not promote material welfare and can be excluded from economics, if we follow the definition given by Marshall. This is not correct, in the opinion of Robins, which because those who produce these things are engaged in economic activities. And activities economic if there is demand for it and there is supply for it because people are willing to pay a price for the same.
- The definition of economics As given by Marshall is ‘classificatory.’ it classified ‘economic’ and non ‘economic’, ‘material’ and ‘non-material’, ‘welfare’ and ‘non welfare’ activities. Robbins want that the definition of economics should be analytical.
- Professor J. K. Mehta has said that it is not clear what Marshall means by ‘ordinary business of life’. It will be very difficult to separate economic activities into ordinary and extra-ordinary.
- Professor Pigou have criticized definition of economics have given by Marshall as Nehru, but for opposite to Robbins. Professor Pigou regards economics as a science of “economic welfare” then merely ‘material welfare’.
Because of all these criticisms, even the definition given by Marshall has been discarded on theoretical ground.