Adam Smith’s definition of economics /Wealth definition of economics:
Adam Smith is accepted as The pioneer of classical economist. He published the book ” An inquiry into the nature and causes of the wealth of nations” in 1776 A.D. This book is regarded as the Bible of Economics. According to him, ” Economics is an inquiry into the nature and causes of the wealth of nations.” His definition of Economics as a science of wealth was supported by famous classical economists J.B Say, J.S Mill and others. According to J.B Say, “ Economics is that science which treats of wealth.“
To support his definition, Adam Smith divided men into two types:
a) Economic men
b) Noneconomic men
Features of Adam Smith’s definition of economics/ Wealth definition of economics
1) The core of a study is wealth in economics and wealth is the only basis of happiness.
2) Primary importance to wealth and the place of man is secondary.
3) This definition emphasizes the economic man and his economic activities.
The wealth definition of economics was widely criticized. Writers and social reformers such as Ruskin, Carlyle, William Morris, etc criticized it as, ” science of bread and butter”, “gospel of Mammon”, “dark and dismal science”, ” science of the devil” etc.
Major criticisms of Adam Smith’s definition of economics
1) Too much importance to wealth:
Marshall criticized that this definition of economics gives much importance to wealth than man. He treats wealth as one aspect of Economics while the human study is another important aspect to study.
This definition pays no attention to the aspect of human and social welfare. Wealth is only the means, not the end.
3) Concept of Economic men:
The concept of economic men is very wrong. Service providers (doctors, lawyers, teachers) are also not engaged in production but make earning.
4) Narrow definition :
In this definition, wealth has been taken in a very narrow sense. But services can also be exchanged for money & goods and can be regarded as wealth.