Definitions of Economics
can have a good idea about the nature and scope of economics by studying some
of the important definitions of economics. Some of the important definitions of
economics are those of leading economists like Adam Smith, Alfred Marshall,
Lionel Robbins and Samuelson.
Adam Smith's Definition (Wealth
Adam Smith (1723 -90) defined
economics as follows : 'Economics is the
science of wealth'. He is the author of the famous book 'Wealth of Nations' (1776). He is known
as the Father of Political Economy because he was the first person who put all
the economic ideas in a systematic way. It is only after Adam Smith, we study
economics as a systematic science.
The term 'wealth' has a special
meaning in Economics. In the ordinary language, by 'wealth', we mean money, but
in economics, wealth refers to those goods which satisfy human wants. But we
should remember all goods which satisfy human wants are not wealth. For
example, air and sunlight are essential for us. We cannot live without them.
But they are not regarded as wealth because they are available in abundance and
unlimited in supply. We consider only those goods which are relatively scarce
and have money value as wealth.
We study about consumption,
production, exchange and distribution of wealth. J.S. Mill defined economics as
'the practical science of the production and distribution of wealth'. Adam
smith was of the view that economics was concerned with the problems arising
from wealth-getting and wealth-using activities of people. He was interested
mainly in studying the ways by which the wealth of all nations could be
is a lot of criticism against Adam Smith's definition of economics. It has got
a bad name for economics. Some social scientists like Ruskin and Carlyle called
it 'a dismal science', 'a dark science'. But this criticism is unfair, because
it is based on a misunderstanding about the nature and scope of economics. As
this definition emphasized 'wealth', they thought it is all about money. They
concluded that economics taught men and women how to make money. So they called
it a selfish science as in their opinion it emphasized on 'the means to get
The above charge against economics is a false one. In
economics, wealth does not refer to money. It refers to the scarce goods which
satisfy our wants. Moreover, early economists used the term 'wealth' in the
sense of welfare.
A great demerit of Adam Smith's definition is that there is
over-emphasis on wealth. There is no doubt that we have to study about wealth
in economics. But it can be only a part of the study. There is the other side.
In fact, it is a more important side and that is the study of man. Economics is
a social science. Hence the proper study of mankind should be man and not
When we discuss Adam Smith's definition of economics, we
have to keep in mind the time in which he lived. He was writing his book at a
time when England was on the eve of Industrial Revolution. The large
investments of capital and use of largescale machinery enabled England to
produce wealth on a large scale. So it is only natural that Adam Smith
emphasized on wealth and considered economics as 'an enquiry into the nature
and causes of the wealth of nations'.