DEFINITION OF ECONOMICS

 

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  DEFINITION OF ECONOMICS
• WEALTH DEFINITION
• WELFARE DEFINITION
• SCARCITY DEFINITION
• GROWTH DEFINITION

·         MICRO ECONOMICS

·         DR SHASHI AGAGRWAL

• MEANING OF ECONOMCS
• ECONOMICS IS DERIVED FROM THE GREEK WORD ,” OIKONOMIA”WHICH CAN BE DIVIDED INTO TWO PARTS:-
• OIKOS WHICH MEANS HOUSE
• NEMEIN WHICH MEANS MANAGEMENT

·         MANAGEMENT OF HOUSEHOLD WITH LIMITED FUNDS

·         ECONOMICS IS THE A SCIENCE OF HUMAN BEHAVIOR WHICH IS CONCERNED WITH THE ALLOCATION OF SCARCE MEANS OR RESOURCES

• DEFINNITION OF ECONOMICS
• ECONOMICS IS SOCIAL SCIENCE, A CLASSIFIED BODY OF KNOWLEDGE, CONCERNING HUMAN RELATIONSHIP CLUSTERED ABOUT MAN’S EFFORTS TO EARN LIVING. THE ORIGIN OF SUBJECT COULD BE TRACED TO THE WORKS OF THE GREEK PHILOSPHER ARISTOTLE WHO CONFINED THE STUDY OF ECONOMICS TO THE STUDY OF ECONOMICS TO HOUSEHOLD
• ADAM SMITH IN 1776 LAID DOWN THE STRONG FOUNDATION FOR THE GROWTH OF ECONOMICS IN HIS BOOK,” AN ENQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS”
• ADAM SMITH IS CALLED THE FATHER OF  MODERN ECONOMICS
• THE WEALTH DEFINITION OF ECONOMICS
• ADAM SMITH,” ECONOMICS IS AN ENQUIRY INTO THE NATURE AND CAUSES OF WEALTH OF NATION
• SCIENCE OF WEATLH WITH AN OBJECTIVE TO INCREASE WEALTH AND RICHNESS OF A COUNTRY.
• THE SPIRIT OF ENQUIRY IS REFLECTED IN THE WRITING OF THE SUCCESSOR LIKE JB SAY,JSMILL AND W.S JEVENOS
• J.S MILL,” ECONOMICS INVESTIGATE INTO THE NATURE OF WEALTH AND LAW OF PRODCUTION AND DISTRIBUTION.
• THE TERM WEALTH WAS TAKEN AS RICHES OF ABUNDENCE OF MONEY OR SCARCE GOODS HAVING EXCHANGE VALUE.
• J.B SAY : ECONOMICS IS TH SCIENCE WHICH TREATS OF WEALTH
• WALKER: ECONOMIC IS THE BODY OF KNOWLEDGE WHICH RELATES TO WEALTH.
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• FEATURES OF DEFINITION:
• THE PURPOSE OF THE STUDY IS TO INCREASE THE WEALTH OF THE NATION.IT INCLUDES THE CONSUMPTION, PRODUCTION, EXCHANGE AND DISTRIBUTION OF WEALTH.
• WEALTH MEANS MATERIAL GOODS WHICH ARE LIMITED. MATERIAL GOODS A RE THOSE WHICH COULD BE SEEN,TOUCHED LIKE GOLD,CLOTHES,FURNITURE ETC
• IT DEALS WITH THE CAUSES OF CREATION OF WEALTH IN AN ECONOMY
• IT STUDIES ECONOMIC MAN. WHO IS FULLY AWARE OF SELF INTEREST AND MAKES EFFORTS TO ACHIEVE SELFISH ENDS

 

• CRITICISM
• JOHN RUSKIN, THOMAS CARLYLE, CHARLES DICKENS, WILLIAM MORRIS AND MATHEW ARNOL. ECONOMICCS WAS BRANDED AS THE BREAD AND BUTTER SCIENCE,THE GOSPEL OF MAMMON.A SCIENCE THAT TAUGHT SELFISHNESS AND LOVE FOR MONEY: DARK AND DISMISSAL SCIENCE, A BASTARD SCIENCE.A PIG SCIENCE AND SO ON

1. MORE EMPHASIS ON WEALTH: MORE IMPORTANCE TO WEALTH THAN TO MAN. WEALTH IS A MEAN TO SATISFY MAN’S WANTS.
2. NARROW DEFINITION : WEALTH ONLY TANGIBLE MATERIAL GOODS AND NON MATERIAL GOODS HAVE BEEN EXCLUDED FROM IT
3. CONCEPT OF ECONOMIC MAN :BUT ACCORDING TO MARSHALL AND HIS FOLLOWERS SUCH AN ECONOMCI MAN WHO WORKS FOR HIS SELFISH MOTIVES ALONE IS NOT FOUND
4. ONLY TANGIBLE GOODS ARE INCLUDED IN WEALTH
5. IGNORES WELFARE AND PROBLEM OF SCARCITY AND CHOICE. ONLY FOCUSING ON STUDY OF WEALTH GETTING ACTIVITIES
6. DOES NOT HIGHLIGHT THE WAYS OR MEANS TO ACQUIRE THE WEALTH.WHETHER WEALTH HAS TO BE OBTAINED THROUGH LEGAL OR ILLEGAL MEANS

• THE WELFARE DEFINITION OF ECONOMICS

·         NEO CLASSICAL ECONOMISTS LIKE MARSHALL, J.S MILL, PIGOU AND CANAN HAVE INCLUDED IN THE SCOPE OF ECONOMICS THOSE ACTIVITIES OF MAN WHICH ARE UNDERTAKEN TO ACUIRE MATERIAL GOODS WHICH PROMOTE THE WELFARE OF ECONOMICS.

·         MARSHALL,”ECONOMICS IS THE STUDY OF MANKIND IN THE ORDINARY BUSINESS LIFE,IT EXAMINES THAT PART OF INDIVIDUALL AND SOCIAL ACTION WHICH IS MOST CLOSELY CONNECTED WITH THE ATTAINMENT  AND WITH THE USE OF MATERIAL REQUISITES OF WELL BEING

• FEATURES OF MATERIAL WELFARE DEFINITON

1. MORE IMPORTANCE TO MEN AS COMPARED TO WEALTH
2. STUDIES OF ECONOMIC ACTIVITIES OF THOSE WHO LIVE IN THE SOCIETY
3. ORDINARY BUSINESS OF LIFE MEANS THE ECONOMIC ACTIVITIES OF A MAN WHICH ARE MOSTLY CONCERNED WITH WEALTH GETTING AND WEALTH SPENDING
4. IT STUDIES REAL MAN WHO BELIEVES IN SOCIAL WELFARE
5. STUDIES THOSE ACTIVITIES WHICH ARE CONNECTED WITH THE MATERIAL REQUISTIES OF WELL BEING
6. THOSE MATERIL MEANS WHICH PROMOTE SOCIAL WELFARE
7. CLASSIFICATORY “ THEY HAVE DIVIDED THE ECONOMICS ACTIVITIES OF MAN INTO TWO CLASSES : ORDIANRY AND EXTRAORDINARY.WELFARE AND NON WELFARE,SOCIAL AND INDIVIDUAL ETC
8. MONEY IS THE MEASURE OF MATEIRAL WELFARE: PIGOU : THAT PART OF WELFARE WHICH IS MEASURED THROUGH MONEY ( DIRECTLY OF INDIRECTLY)

• MERITS
• MORE RELEVENT
• MORE COMPREHENSIVE
• SCIENTIFIC
• SCIENCE OF HUMAN WELFARE FROM A SCIENCE OF WEALTH
• EMPHASIS : ECONOMICS DOES NOT STUDY WEALTH ALONE RATHER HUMAN WELFARE ALSO
• ECONOMICS IS BIEING REGARDED AS AN ENGINE OF SOCIAL BETTERMENT
• CRITICISM

1. ORDINARY BUSINESS OF LIFE IS NOT CLEAR. MARSHALL HAS SIGNIFIED ECONOMIC ACTIVITIES THAT IS WEALTH EARNING AND WELATH SPENDING. ALSO NOT CALRIFIED WHICH ARE ORDINARY AND WHICHA RE EXTRA ORDINARY
2. LIMITED SCOPE ONLY CONCERNED WITH THE ATTAINMENT OF THE MATERIAL GOODS.
3. THE VIEW OF WELFARE DEFINITION : ECONOMICS IS SOCIAL SCIENCE
4. ECONOMICS IS HUMAN SCIENE BECAUSE IT STUDIES ECONOMIC ACTIVITIES OF ALL HUMAN BEING WHETHER THEY ARE THE MEMBERS OF THE SOCIETY OR NOT.

5.       NOT ANALYTICAL BUT CLASSIFICATORY:DOES NOT TELL WHAT ECONOMCIS PROBLESM ARE AND HOW IT ARISES

6.       LORD ROBINS : ECONOMICS IS ONLY AS POSITIVE SCIENCE

7.       WRONG AND IMPRACTIABLE BECAUSE ECONOMICS STUDEIS ALL THOSE ACTIVITIES WHICH ARE RELATED TO INCOME EARNING AND INCOME SEPNDING WHETHER THEY PROMOTE WELL BEING OR NOT

• THE SCARCITY DEFINTION OF ECONOMICS
• MENGER,PETER AND ENGLISH ECONOMIST STIGLER EXPRESSED THEIR VIEWS BUT EXAMINED IN DETAIL BY PROF ROBBINS IN HIS BOOK,” AN ESSAY ON THE NATURE AND SIGNIFICANCE OF ECONOMIC SCIENCE” IN 1932
• LORD ROBBINS:- ECONOMICS IS A SCIENCE  WHICH STUDIES HUMAN BEHAVIOUR AS A RELATIONSHIP BETWEEN ENDS AND SCARCE MEANS WHICH HAVE ALTERNATIVE USES
• FUNDAMENTAL CHARACTERSTICS

1. UNLIMITED WANTS
2. SCARCITY OF MEANS : SCARCITY DOES NOT MEAN ABSOLUTE SCARCITY BUT RELATIVE IN RELATION TO DEMAND
3. ALTERNATIVE USES OF MEANS
4. THE ECONOMIC PROBLEM: IN THE WORD OF ROBINS WHEN TIMES AND MEANS FOR ACHIEVING ENDS ARE LIMITED AND CAPABLE OF ALTERNATIVE APPLICATION AND ENDS ARE CAPABLE OF BEING DISTINGUISHED IN ORDER OF IMPORTANCE THE BEHAVIOUR NECESSARILY ASSUMES THE FORM OF CHOICE.
5. DIFFERENT FROM TECHNICAL PROBLE : BEST METHOD

 

• FEATURES

1. BY END LORD ROBBINS MEANS WANTS, WE STUDY THOSE WANTS OF A MAN WHICH ARE CONCERNED WITH GOODS AND SERVICE. UNLIMITED WANTS. CONCERNED WITH SATISFACTION OF ECONOMIC WANTS IRRESPECTIVE OF THEIR BEING VIRTUOUS
2. LIMTED OR SCARCE RESOURCES
3. ECONOMIC PROBLEMS ARE THERE BECAUSE LIMITED MEANS HAVE ALTERNATIVE USES
4. WANTS DIFFER IN URGENCY
5. ECONOMIC PROBLEM: UNLIMITED WANTS, SCARCE MEANS, ALTERNATIVE MEANS AND DIFFERENT URGENCY OF WANTS. PROBLEM OF CHOICE MAKING IS CALLED ECONOMIC PROBLEM
6. DUE TO PROBLEM OF CHOICE IN ORDER TO FULFILL ONE WANT WE HAVE TO SACRIFICE THE ANOTHER

• MERITS
• POSITIVE SCIENCE : EXPLAINS THE NATURE OF ACTIVITIES
• STUDY OF HUMAN BEHAVIOUR :STUDIES THE ECONOMI CACTIVITIES OF ALL LIVING WHETHER IN SOCIETY OR NOT, STUDY THE BEHAVIOUR OF BOTH AT INDIVIDUAL AND SOCIAL LEVEL
• ANALYTICAL; : PROBLEMS OF MAN ARE ANALYSED, THE SCIENTIFIC ORIGIN OF THE ECONOMCIS PROBLEM AND THEIR SOLUTION
• WIDER SCOPE : ALL SORTS OF ECONOMCI ACTIVITIES RELATING TO SCARCITY
• UNIVERSAL :PROBLEM OF UNLIMITED WANTS AND MEANS ARE LIMITED
• MORE LOGICAL AND PRECISE EXPLANATION TO NATURE OF ECONOMICS

 

• CRITICISM ( DURBIN,WOTTON,FRASER AND BOULDING)

1. IGNORES THE SOCIAL ASPECT OF ECONOMIC ACTIVITIES
2. ECONOMIC IS NEUTRAL BETWEEN ENDS. ECONOMCIS DOES NOT AGREE WITH THE VIEW. ECONOMICS IS SOCIAL SCIENCE ,HAVE TO PRONOUNCE JUDGMENT AS TO WHICH ENDS ARE NOBLE AND WHICH ARE TO BE DISCARDED
3. CONCEALED CONCEPT OF WELFARE
4. ROBINS SAID ECONOMICS IS ONLY POSITIVE SCIENCE
5. SCARCITY IS NOT ONLY THE CASUE OF ECONOMIC PROBLEM
6. STUDY OF STAIC CONDITIONS
7. NOT APPLICABLE TO RICH COUNTIRES

• THE GROWTH DEFINITION OF ECONOMICS
• PAUL SAMUELSON( 1915-2009) HAS GIVEN DEFINITION ON THE BASIS OF GROWTH ASPECTS
• ECONOMICS IS THE STUDY OF HOW PEOPLE AND SOCIETY END UP CHOOSING WITH OR IWTHOUT
• THE USE OF MONEY,TO EMPLOY SCARCE PRODUCTIVE RESOURCES THAT COULD HAVE ALTERNATIVE USES TO PRODUCE VARIOUS COMMODITIES

 

• AND DISTRIBUTE THEM FOR CONSUMPTION, NOW OR IN THE FUTURE, AMONG VARIOUS PERSONS OR GROUPS IN THE SOCIETY.
• ECONOMIC ANALYSES THE COSTS AND BENEFITS OF IMPROVING PATTERN OF RESOURCE USE
• THE MAIN FEATURES

1. APPLICABLE EVEN IN BARTER ECONOMY WHERE MONEYMEASUREMENT IS NOT POSSIBLE
2. DEALS WITH ALLOCATION OF LIMITED RESOURCES TO BE USED IN PRODUCTIVE PURPOSE AND THE SELECTION OF THE MOST EFFICIENT USE OF THE RESOURCES FROM THE ALTERNATIVES AND THE GROWTH WILL DEPEND ON THE CONSUMPTION AND PRODUCTION IN THE ECONOMY.
3. ECONOMICS IS A STUDY OF ECONOMIC SYSTEM
4. INCLUSION OF TIME ELEMENTS IN THE SCOPE DYANMIC
5. UNIVERSAILITY OF APPLICATION