P.A. Samuelson’s Definition of Economics or Growth/ Modern definition of economics:
Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist and the first American to win the Nobel Memorial Prize in Economic Sciences. Economic historian Randall E. Parker calls him the “Father of Modern Economics“. Samuelson gave his definition of economics in his book “Foundations of Economic Analysis” published in 1946 A.D and is considered his magnum opus.
It is derived from his doctoral dissertation. The old definitions of Economics were static to the dynamic problems of society. The growth definition of Samuelson recognizes the dynamic changes taking place in the means (resources) and ends (wants) with the passage of time.
The growth-oriented definition is concerned with the effective allocation and use of resources so that economic growth can be increased. It was supported by economists like Benham, Lipsey, C. E. Ferguson, etc.
According to P.A Samuelson, “Economics is a social science concerned chiefly with the way society chooses to employ its resources, which have alternative uses, to produce goods and services for present and future consumption.”
Main features of Growth Definition:
(i) Improvement in Resource Allocation:
Economics analyzes the costs and benefits of improving the way of resource allocation. Improvement of resource allocation and better distributive justice are essential for economic development.
Samuelson has included dynamism in his definition of economics by including the time element. The problem of growth in the passage of time has been included in the theme of his definition.
(iii) The problem of Choice:
The greatest feature of Samuelson definition is that it takes into account the problem of choice in the dynamic framework of economics
(iv) Universally applicable:
These definitions of economics are universally applied. These are related to all type of economic policies and problems of all countries such as developed, developing and underdeveloped. Unemployment, the standard of living and per-capita income are the main problems of the universe. These definitions of economics are related to these areas.
(v) Solved the present days’ issues:
There are many present-day problems i.e. production, distribution, and consumption of economic resources, it is also solved the future problems related to these resources. It provides ways of utilization of economic resources.
Conclusion of Growth definition of economics:
To conclude, we can say that growth-oriented definition of economics is moreover complete and advanced. The growth-oriented definition is formed by combining the Welfare definition and Scarcity definition. All the merits of this definition are covered in the above definition. This definition is universal, practical and dynamic in nature.