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Wealth is the abundance of valuable resources or material possessions.

The word wealth is derived from the old English weal, which is from an Indo-European word stem.[1] An individual, community, region or country that possesses an abundance of such possessions or resources is known as wealthy. Economics The concept of wealth is of significance in all areas of economics, and clearly so for growth economics and development economics yet the meaning of wealth is context-dependent. At the most general level, economists may define wealth as "anything of value" which captures both the subjective nature of the idea and the idea that it is not a fixed or static concept. Various definitions and concepts of wealth have been asserted by various individuals and in different contexts.[2] Defining wealth can be a normative process with various ethical implications, since often wealth maximization is seen as a goal or is thought to be a normative principle of its own.[3][4] There are a variety of modern definitions of economics. Some of the differences may reflect evolving views of the subject itself or different views among economists.[1] The earlier term for 'economics' was political economy. It is adapted from the French Mercantilist usage of conomie politique, which extended economy from the ancient Greek term for household management to the national realm as public administration of the affairs of state.[2] Sir James Steuart (1767) is the first English economist to use 'political economy' in a book title, explaining that just as: Oeconomy in general [is] the art of providing for all the wants of a family, [so the science of political oeconomy] seeks to secure a certain fund of subsistence for all the inhabitants, to obviate every circumstance which may render it precarious; to provide every thing necessary for supplying the wants of the society, and to employ the inhabitants ... in such manner as naturally to create reciprocal relations and dependencies between them, so as to supply one another with reciprocal wants.[3] The title page gave as its subject matter "population, agriculture, trade, industry, money, coin, interest, circulation, banks, exchange, public credit and taxes".[3] The philosopher Adam Smith (1776) defines the subject as "an inquiry into the nature and causes of the wealth of nations," in particular as: a branch of the science of a statesman or legislator [with the twofold objective of providing] a plentiful revenue or subsistence for the people ... [and] to supply the state or commonwealth with a revenue for the publick services.[4] J.-B. Say (1803), distinguishing the subject from its public-policy uses, defines it as the science of production, distribution, and consumption of wealth.[5] On the satirical side, Thomas Carlyle (1849) coined 'the dismal science' as an epithet for classical economics, in this context,

commonly linked to the pessimistic analysis of Malthus (1798).[6] John Stuart Mill (1844) defines the subject in a social context as: The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.[7] Alfred Marshall provides a still widely-cited definition in his textbook Principles of Economics (1890) that extends analysis beyond wealth and from the societal to the microeconomic level: Economics is a study of man in the ordinary business of life. It enquires how he gets his income and how he uses it. Thus, it is on the one side, the study of wealth and on the other and more important side, a part of the study of man.[8] Lionel Robbins (1932) developed implications of what has been termed "[p]erhaps the most commonly accepted current definition of the subject":[9] Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.[10] Robbins describes the definition as not classificatory in "pick[ing] out certain kinds of behaviour" but rather analytical in "focus[ing] attention on a particular aspect of behaviour, the form imposed by the influence of scarcity."[11] Some subsequent comments criticized the definition as overly broad in failing to limit its subject matter to analysis of markets. From the 1960s, however, such comments abated as the economic theory of maximizing behavior and rational-choice modeling expanded the domain of the subject to areas previously treated in other fields.[12] There are other criticisms as well, such as in scarcity not accounting for the macroeconomics of high unemployment.[13] Gary Becker, a contributor to the expansion of economics into new areas, describes the approach he favors as "combin[ing the] assumptions of maximizing behavior, stable preferences, and market equilibrium, used relentlessly and uninchingly."[14] One commentary characterizes the remark as making economics an approach rather than a subject matter but with great specificity as to the "choice process and the type of social interaction that [such] analysis involves."[15] A recent review of economics definitions includes a range of those in principles textbooks, such as descriptions of the subject as the study of:

the economy the coordination process the effects of scarcity the science of choice human behavior human beings as to how they coordinate wants and desires, given the decision-making mechanisms, social customs, and political realities of society.

It concludes that the lack of agreement need not affect the subject-matter that the texts treat. Among economists more generally, it argues that a particular definition presented may reflect the direction toward which the author believes economics is evolving, or should evolve.[16]

Welfare economics is a branch of economics that uses microeconomic techniques to

evaluate economic well-being, especially relative to competitive general equilibrium within an economy as to economic efficiency and the resulting income distribution[1] associated with it. It analyzes social welfare, however measured, in terms of economic activities of the individuals that compose the theoretical society considered. Accordingly, individuals, with associated economic activities, are the basic units for aggregating to social welfare, whether of a group, a community, or a society, and there is no "social welfare" apart from the "welfare" associated with its individual units. Welfare economics typically takes individual preferences as given and stipulates a welfare improvement in Pareto efficiency terms from social state A to social state B if at least one person prefers B and no one else opposes it. There is no requirement of a unique quantitative measure of the welfare improvement implied by this. Another aspect of welfare treats income/goods distribution, including equality, as a further dimension of welfare.[2] Social welfare refers to the overall welfare of society. With sufficiently strong assumptions, it can be specified as the summation of the welfare of all the individuals in the society. Welfare may be measured either cardinally in terms of "utils" or dollars, or measured ordinally in terms of Pareto efficiency. The cardinal method in "utils" is seldom used in pure theory today because of aggregation problems that make the meaning of the method doubtful, except on widely challenged underlying assumptions. In applied welfare economics, such as in cost-benefit analysis, money-value estimates are often used, particularly where income-distribution effects are factored into the analysis or seem unlikely to undercut the analysis. The capabilities approach to welfare argues that freedom - what people are free to do or be should be included in welfare assessments, and the approach has been particularly influential in development policy circles where the emphasis on multi-dimensionality and freedom has shaped the evolution of the Human Development Index.

Definition of Economics by Alfred Marshall Neoclassical Economist Definition of Economics by Alfred Marshall (1842-1924) led the Neo-classical school. Alfred Marshall gave economics a respectable place among other social sciences. In his book Principles of Economics" published in 1890, has defined economics in these terms, 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 material requisites of well being. This definition of economics by Alfred Marshall neoclassical economist clearly point out that economics is on the one side a study of wealth and on the other

and more important side a part of study of man. According to William Henry Beveridge, Economics is the study of general methods by which men cooperate to meet their material needs. Other neoclassical economist also defined economics as a study of material welfare and support Alfred Marshall. For example, Canon says that the aim of political economy is the explanation of the general causes on which the material welfare of human beings depends. Major Points of Definition of Economics by Alfred Marshall However these economists were of the opinion that the aim of economics is to study human activities which are conducive to human welfare in its material aspect. From the definition of Alfred Marshall, we see that he lays emphasizes on the below points: 1. 2. 3. 4. Study of an Ordinary Man Economics is not a Useless Study of Wealth Economics is a Social Science Study of Material Welfare

What is economics? A definition gives the concise meaning and essence of a thing or subject. Economics is a dynamic subject. Therefore, it is not an easy task to provide a single and accurate definition of economics. In fact, economics is an unfinished science and is always in the socio-economic conditions. Here we can get several definitions by several economists. There is famous statements by Mrs. Barbara Wooten, Whenever six economists are gathered, her are seven opinions. For the sake of simplicity, several definitions of economics can be divided into four parts. 1. Wealth definitions or Classical definitions. 2. Welfare definitions or Neo-classical definitions. 3. Scarcity definitions or Modern definitions. 4. Growth definitions or recent definitions.

1. Wealth definition Adam Smith was the first economist to present a systematic analysis of economics. Therefore, he is regarded as the father of Economics. In this famous book An Enquiry into the Nature and Causes of the Wealth of Nations published in 1776, Smith defined economics as a science of wealth. From 1776 to 1850, several great economists such as J.B. Say, David Ricardo, T.R. Malthus, J.S Mill, etc. had fully supported and followed the economic ideas of Adam Smith. So, they are called classical economists. They were of the view that economics is concerned with production, consumption, exchange and distribution of wealth. Some important definitions are as follows:

According to Adam Smith, Economics is an enquiry into the nature and causes of the wealth of Nations. In the words of J.S Mill, Economics is the practical science of production and distribution of wealth. According to J.B. Say, Economics is the body of knowledge which relates to wealth. Characteristics of Wealth Definition 1. Study of wealth, 2. Secondary place to the study of man, 3. Meaning of wealth, 4. Study of economic man, 5. Investigation of the causes of wealth. 2. Welfare Definition Alfred Marshall, an eminent English economist, recognized the incompleteness of the earlier definition of economics and brought about a fundamental change in it. According to him, economics is, on the one side, a study of man. Marshalls Principle of Economics Published in 1890 he defined economics as a subject concerned with those activities which promote the material welfare of mankind. Many economists such as A.C. Pigou, Cannon, Beveridge, etc supported this view. An opinion of different scholars is given below: According to A. Marshall, 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 with the use of material requisites of well-being. According to Pigou, Economics deals with that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money. In the words of Cannon, Economics is the study of material welfare. Characteristics of Welfare Definition 1. Primary concern, 2. Study of ordinary man, 3. Study of material welfare, 4. Social science, 5. Normative science.

3. Scarcity Definition Professor Lionel Robbins of London School of Economics, in his book, An Essay on the Nature and Significance of Economic Science, published in 1932 gave a more exact and precise definition of economics. He defined economics entirely in terms of scarcity of means. Economists like Karl Manger, Peter, Stigler, etc. supported the view of Robbins. Opinions of different economists are as follows; According to Robbins, Economics is the science which studies human behavior as a

relationship between ends and scarce means which have alternative uses. In the words of Stigler, Economics is the study of principles governing the allocation of scarce means among competing ends when the objective of allocation is to maximize the attainment of the ends. According to Scitovosky, Economics is a science concerned with the administration of scarce resources. Characteristics of Scarcity Definition 1. Unlimited ends, 2. Scarce means, 3. Alternative uses of means, 4. Wants differ in urgency, 5. Problem of choice

Criticism of Wealth Definition This definition has been criticized by many writers such as Ruskin, Carlyle, Bailey, Morris, etc. They have characterized it as a 'Bastard Science' or 'Dismal Science' or 'Bread and Butter Science' or 'Gospel of Mammon'.The main criticisms are as under: 1. Narrow meaning of wealth, 2. Undue importance to wealth, 3. Unrealistic concept of economic man, 4. Narrow subject matter of economics, 5. Neglect of economics welfare. However, the importance of this definition is that they have provided a unique place to economics.They could distinguish economics from other social sciences such as political science,ethics,etc. It was only with the publication of Adam Smiths book,'The Wealth of Nations'that economics could develop as an independent and important economic discipline. Criticism of Welfare Definition This definition of economics has been strongly criticized by Robbins on the following grounds: 1. Difficults to separate material and non-material things, 2. Connection between economics and welfare, 3. Welfare cannot be quantitatively measured, 4. A social science, 5. Confusion between ordinary and extra ordinary business of life Criticism of Scarcity Definition Several economists like Boulding, Fraser, Durbin, Beveridge, Wootton, etc.have strongly criticized Robbins' definition of economics on the following grounds: 1. Hidden concepts of welfare, 2. Even abundance may create economic problems,

3. Self-contradictory, 4. Economics not only a positive science, 5. Incomplete definition. However, Ribbins' definition is analytical, scientific and universally applicable.His definition, with minor changes here and there forms the basis of all other definitions of economics that has been given since Prof.Robbins gave his definition. Marshalls Definition Economics is the study of man in ordinary business of life. It enquires how he gets his income and here he uses it. It examines that part of individual and social action, which is most closely connected with the attainment and with the use of material requisites of wellbeing..It is the study of wealth on one side and on the other side, which is more important, it is a part of the study of man. Robbins Definition Economics is the science which studies human behaviour as a relationship between multiple ends and scarce means, which have alternative uses. A comparative study of both the definitions is made on the basis of their similarities and differences. (a) SIMILARITIES 1. Human behaviour: Both the definitions are concerned with human behaviour. 2. Optimization: Both the definitions concentrate on optimization i.e. the best possible situation within given conditions. In Marshalls definition, our aim is to maximize material welfare and in Robbins definition, we are concerned with maximization of satisfaction. 3. Basic pillars: Consumption, production, exchange and distribution of wealth are the basic pillars of both the definitions. 4. Same characteristics of wealth and scarce resources: According to Marshall, wealth is the basic source of maximization of material welfare. Robbins is of the opinion that we maximize our satisfaction by scarce resources. Both the concepts of wealth and scarce resources are synonymous as both have the same characteristics, i.e. utility, transferability and scarcity.

5. Analytical: Marshalls definition is based on the attainment and use of material requisites. Robbins definition is based on the problem of choice. Hence both the definitions are analytical in nature. (b) DIFFERENCES We observe the following dissimilarities between the two definitions. 1. Economic activity material / immaterial: Marshall believes in only material activities which promote material welfare. Robbins believes in both material and immaterial activities to tackle the problem of choice. 2. Social science / natural science: For Marshall, Economics is a social science. On the other hands, Robbins is of the view that Economics is natural science like Physics, Chemistry etc. 3. Normative science / positive science: Marshall is of the opinion that in Economics, we not only consider the problems as they are but we also suggest that how the given problem should be tackled. It means according to Marshall, Economics is basically a normative science. Robbins thinks otherwise. He says that economists must be just neutral observers of economic events around them, ignoring their personal likings. They can talk of facts only. Hence Robbins believes that Economics is basically a positive science in which the economists describe the economics facts as they are. 4. Classification / universality: Marshall has classified the goods into material / non-material and Individuals into social / isolated. Robbins does not believe in such artificial classification. He has analyzed economic problem which appears due to multiple wants and scarce means. It is a universal phenomenon. 5. Practical / theoretical: Marshalls definition is practical in nature. This definition is useful for economic policies.

Robbins definition is theoretical in nature. 6. Social / isolated individual: Marshall considers only the activities of a social person. It ignores the activities of an isolated person. Robbins considers activities of both the persons, i.e. activities of a social person and activities of an isolated person. 7. Appreciable / non-appreciable activities: Marshall considers only appreciable activities of a social person. Robbins considers both appreciable and inappreciable activities of both the social person and isolated person. 8. Human touch: Marshall concentrates on human material welfare. He gives due importance to man. Robbins focuses on scarcity of resources. He gives no importance of man. 9. Welfare / scarcity: Marshalls definition is based on the concept of human material welfare. Robbins definition is based on the concept of scarcity of resources. 10. Scope of Economics: Marshall considers only material aspects of human welfare. It reflects limited scope of Economics. Robbins makes no difference between material and non-material aspects. It indicates wider scope of Economics. 11. Moral values: Marshalls definition makes a direct link of economic activities with moral values. Robbins definition has nothing to do with moral or ethical values. It is the problem of social reformers, politicians etc. 12. Subjective / objective:

The concept of welfare in Marshalls definition is subjective and it varies from person to person and place to place. The concept of scarcity in Robbins definition is objective and applicable equally to every person or to every place. 13. Qualitative / quantitative: The concept of welfare is a qualitative phenomenon in Marshalls definition and we cannot measure it. The concept of scarcity is a quantitative phenomenon in Robbins definition and we can measure it. 14. Cause / effect: In Marshalls definition, major concern is of material welfare which is the effect of economic development. Robbins definition is primarily concerned with allocation of scarce resources which is the cause of economic development. 15. Vague / clear: The pivot of Marshalls definition is welfare which is a vague concept and its indicators change with the passage of time. Robbins definitions is based on a clear concept of scarcity and its basic indicator, i.e. excess demand sustains. 16. Macro / micro approach: In Marshalls definition, material welfare is a macro phenomenon. In Robbins definition, major macro problems like unemployment, inflation etc. has not been considered. It concentrates only on micro aspects of economic activities.

On the basis of above-mentioned facts, it is concluded that though Marshalls definition of Economics has a remarkable status in economic literature, yet Robbins definition is logically better. That is why modern economists own it and prefers it to classicals and neo-classicals definition of Economics.