Samuelson's definition is known as a modern definition of economics.
According to Samuelson, 'Economics is a social science concerned chiefly with the way society chooses to employ its resources, which have alternative uses, to produce goods and services for present and future consumption'.
The above definition is general in nature. There are many common points in the definitions of Robbins and Samuelson.
Samuelson's definition tells us that economics is a social science and it is mainly concerned with the way how society employs its limited resources for alternative uses. All this we find in the definition of Robbins. But Samuelson goes a step further and discusses how a society uses limited resources for producing goods and services for present and future consumption of various people or groups.
An interesting point that Samuelson tells is that the society may or may not make use of money.
Samuelson has coined the concept of Net Economic Welfare.
'According to Samuelson, 'Net Economic Welfare (NEW) is an adjusted measure of total national output that includes only consumption and investment items that contribute directly to economic welfare'.
As we become rich, generally, we prefer leisure to income. When we allocate more time for leisure, gross national product (GNP) may come down. But welfare goes up. So when we estimate GNP, we must include satisfaction, derived from leisure by giving it a value in Net Economic Welfare.
Women do a lot of work at home and it is not taken into account while calculating GNP. But we must include that while estimating GNP. Only then, we will get a correct picture of NEW.
In any society, there will be some illegal activities. (eg. drug trade). We should not include it in NEW. They are 'social bads'
There are some underground activities. Those who earn huge incomes (eg. lawyers, accountants, actors) may not report actual income for tax purposes.
This unaccounted money (black money) must somehow be included in GNP estimates. Otherwise, we will get a lower figure for GNP.
During the process of economic growth, there will be environmental pollution. To get NEW, we should deduct the cost of pollution from the G.N.P.
The concept of Net Economic Welfare has become very important in the study of National Income.
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