Economics is derived from… .

• The word "economics" is derived from a Greek word "oikonomia",

which means "household management" or "management of house
affairs" -i.e., how people earn income and resources and how they
spend them on their necessities, comforts and luxuries.
• With the passage of time, the word "oikonomia" was used for an
economy as whole in the sense that how a nation takes steps to
fulfill its desires and preferences with the help of scarce means.
That's why economics was called political economy in its early ages.
1. Economics definition of Adam Smith,
[Wealth definition]
• Adam smith is known as ‘Father
of Economics’. He wrote a book
in 1776 titled “An Inquiry into
the Nature and Causes of
Wealth of Nations”.
• Adam Smith defined economics
as follows : '
'
2. Economics definition by Alfred Marshall,
[Welfare definition]
• Alfred Marshall in his book
“Principles of Economics” published
in 1890, has defined economics in
these terms,

• Economics is the study of human

activities in the ordinary course of
business. It studies how man attains
his income and how he utilizes it. In
this way, it studies wealth, on one
hand and on the other hand, it is a
part of the study of man, which is
more important.
3. Economics definition by Lionel Robbins,
[Choice or Scarcity definition]
• In 1931, Lionel Robbins in his
book, “Nature and Significance
of Economics” gave the
following definition:
• “Economics is the pure science
which studies human behavior
as a relationship between ends
and scarce means which have
alternative uses”.
This definition is logically explained with
the help of following point:-
1) The Human wants are
unlimited(ends): Human beings
have unlimited wants. They are
constantly making efforts to satisfy
unlimited wants with limited
resources. The nature of these
unlimited wants is such that if one
want is satisfied another want
arises. It is impossible that a person
has all of his wants fulfilled. So the
struggle to produce more goods or
get more income continues for the
whole life.
2)Scarcity of Resources(means):
Robbins definition stated that
through on one side human needs
are unlimited yet on the other side,
the means to satisfy these wants,
like- time, power, money etc. are
also limited. Due to this, many of
man’s needs remain unsatisfied.
• If all the things were freely
available to satisfy then unlimited
human wants there would not
have arisen any scarcity hence no
economic goods, no need to
economic and no economic
problem.
3)Alternative Uses:-The third important proposition of Robbins definition is
the scarce resources available to satisfy human wants have alternative
uses.
• For example if a piece of land is used for the production of sugarcane it
cannot be utilized for the growth of another crop at the same time. Man
therefore, has to choose the best way of utilizing the scarce resources
which have alternative uses and choices are the problems confronting to
the society.
4) Problem of choice:- The choice is the process of selecting a few goods
or wants from the bundles of goods or wants. Human wants are unlimited.
So, they are unable to fulfill all their wants at once. They can satisfy only
some of their wants. Some wants should be sacrificed to get some other
wants. Hence, people postponed less urgent wants to satisfy more urgent
wants. For example, a boy desiring to buy a book does not visit the cinema
hall. Thus, the problem of choice deals with the utilization of scarce
resources in such a way that it satisfies human wants in the best possible
way
Criticism on definition of Economics
by Robbins :
1.Economics not a pure science:
• Robbins has raised the status of economics he says that a
pure science, But it is a social science. It deals with the behavior of
human long. In pure science whatever is stated today will absolutely
be true even two centuries later.
• Two molecules of hydrogen and oxygen will always make
water. But as far as human behavior is concerned it is concerned it
keeps on changing from time to time. More ever, there so laboratory
to test the human behavior as physics and chemistry. Thus
economics cannot be eaten with pure science.
2)The economic problem for a rich and sound economy is different
from the underdeveloped or poor economy. Here the resources are not
limited. In fact, resources are plenty in this type of economy so
problem of scarcity never arises in fact problem of abundant arises in
rich countries.
3) Relation with Welfare:-
• Robbins’ criticized Marshall’s definition on the ground of welfare.
However limited means are used to fulfill unlimited wants. Thus, it
means that maximizing satisfaction will lead to more welfare. Hence,
Robbins’ definition is related with welfare also.
4. Economics definition by Paul Samuelson,
[Growth and Development definition]
•
• 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.