Alfred Marshall’s definition of economics /Material welfare definition of economics:
Disagreeing with the definition of economics given by classical economists, Neo-classical economists have defined economics as a subject related to the material Welfare of a man or group in the society. Professor Marshall, published a book,” Principles of Economics’ in 1890 and defined economics as “political economy or economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and use of the material requisites of well-being.”
Economics on one side is the study of wealth and on the other and more important side, a part of the study of man.”
The characteristics of material welfare definition as follows:-
1) Study of material welfare:
This definition prioritizes welfare. Immaterial aspect does not come within the domain of Economics. Economic activities can be personal and social.
2) Study of man:
Marshall gave primary importance to men. He said that wealth is the means that increases human welfare but not the end of all economic activities.
3) Study of personal and social activities:
Marshall said that economic studies personal and social activities. The study of personal economic activities on one hand and of social Institutions on the other is economics.
4) Study of the ordinary business of life:-
Man spends business life, acquire and use wealth being involved in economic activities. Economics studies this variety of activities. A beggar or a thief, on the other hand, are not ordinary person because begging and theft are not a business of ordinary nature. Such activities are not studied in economics.
Criticisms of Alfred Marshall’s definition of economics:
Marshall’s definition was recognized as the best definition for more than 40 years but with the publication of Professor Robbin’s famous book ” An essay on the nature and significance of economic science”, Marshall’s definition went into controversy. Lionel Robbins sharply criticizes Marshall’s definition on the following grounds:
1) Material welfare:
Robins criticizes that, economic activities are not related only with the material sector but also with the service sector. Dancing, singing, painting and teachers’ service also have economic aspect. He also criticized that it is difficult to measure welfare in terms of money.
2) Classificatory rather than analytical:
This definition studies certain human activities connected with material welfare. It does not cover human activities, which are not connected with material welfare. So, the distinction is made between economic and non economic man. Hence, he criticized that human activities should not be divided.
Economics is the study of material goods only means to restrict the scope of Economics. Economic activities flow in material and immaterial goods. So, Robbins said that material welfare definition has falsely defined economics.
4) Economics as a human science:
According to Marshall, economics is a social science but Robins argues that the discipline studying each and every activity of man in his ordinary business of life is a human science.
To sum up, we can say that even though it is an acceptable definition of economics, it suffers some serious weaknesses since it tends to relate economic activities to material goods only and gives much priority to categorization.