Economics as a
Science of Scarcity and Choice:
Robbins Definition of Economics:
Marshall’s definition of economics remained an
article of faith with all economists from 1830 to 1932. However, with the
publication of Robbins book 'Nature and Significance of Economic
Science' (1932), there developed a fresh controversy in regard to the
definition of economics. Lionel Robbins, after criticizing the definitions given
by the Classical and Neo-classical economists, gave his own definition of
Economics. According to him:
Firstly, the definition of Economics given by
him is superior to that of others because it does not contain any reference of
the term material or welfare. Secondly, it applies as much to the case of
an isolated individual as to the complicated net working of society. Thirdly,
it raises the status of Economics to that of Science. Fourthly, it makes
Economics a positive science which deals only with facts, It forbids the
economists to pass any value judgment of what is good or bad, right or wrong,
Lionel Robbins claiming his definition
Economics precise, scientific and superior, defines Economics book ‘Nature
and Significance of Economics Science' (Published in 1932):
"A science which studies human behavior as a
relationship between ends and scarce means which have alternative uses".
This definition is based on the following five
Main Pillars of Robbins's Definition:
The Human wants or ends are unlimited: Human wants referred
to as ends by Robbins are unlimited. They increase in quantity
and quality over a period of time. They vary among individuals
and overtime for the same individual. It is not possible to find
a person who will say that his wants for goods and services have
been completely satisfied. This is because of the fact that when
one want is satisfied, it is replaced by another and there is
then no end to it.
(ii) The ends
or wants vary in importance: The ends or wants are of
varying importance. They are ranked in order of importance as:
(a) necessaries (b) comforts and (c) luxuries. Man generally
satisfies his urgent wants first and less urgent afterwards in
order of their importance.
(iii) Scarcity of resources: Resources are the inputs used
in the production of things which we need. The resources (Land,
labor, capital and entrepreneurship) at the disposal of man are
scarce. They are not found in as much quantity as we need them.
Scarcity means that we do not and cannot have enough income or
wealth to satisfy our every desire. Scarcity exists because
human wants always exceed what can be produced with limited
resources and time that Nature makes available to man at any one
time. Scarcity is a fact of life. It occurs among the poor and
among the rich. The richest person on earth faces scarcity
because he too cannot satisfy all his wants with the limited
time available to him.
(iv) According to Robbins: the unlimited
ends and the scarce resources provide a foundation to the field of
Economics. Since the human wants are innumerable and the means to satisfy
them are scarce or limited in supply, therefore, an economic problem arises.
If all the things were freely available to satisfy the unlimited human
wants, there would not have arisen any scarcity, hence no economic goods, no
need to economic and no economic problem. Scarcity, thus, can be defined as
the excess of human wants over what can be actually produced in the economy.
(v) Economic resources have alternative uses:
The fourth important proposition of Robbins definition is that the scarce
resources available to satisfy human wants have alternative uses. They can
be put to one use at one time. For instance, if a piece of land is used for
the production of sugarcane, it cannot be utilized for the growth of another
crop at the same time. Man, therefore, has to choose the best way of
utilizing the scarce resources which have alternative uses. The scarcity
resources and choices are the key problems confronting every society.
The choices to be made by it are:
What goods shall be produced and in what
How should the various goods and services be
How should the goods and services be
Summing up the foundation of economic science
according to Robbins, is based on satisfaction of human wants with scare
resources which have alternative uses.
Merits of Robbins's
Definition of Economics:
There are many admirers of Robbins definition. It
has the following merits:
Status of a positive science: Robbins tries to make
economics a more exact science. According to him, economics has
nothing to do with ends. They may be noble or ignoble, material
or non-material. Economics is not concerned with them as such.
An analytical definition: Robbins definition makes study of
economics analytical. It studies the particular aspect of human
behavior which is imposed by the influence of scarcity.
A universal definition: Robbins definition is applicable
everywhere. It is concerned with unlimited wants and limited
resources which is the problem facing every economy socialistic
Clear on the nature and scope of economics: Robbins
definition serves to specify the nature, scope and subject
matter of economics. According to him, an economic problem is
characterized by the possibility of exercising choice between
ends an which have alternative uses.
Valuation is the central problem: According to Robbins,
valuation is the central problem of economics. Wherever the ends
are unlimited and the resources scare, they give rise to an
economic problem Marshall’s definition does not identity this
Criticism on Robbins Definition of Economics or
Robbins definition of economics has been bitterly
criticized by eminent writers Hicks, Longe, Durbin, Frazer, etc., on the
Reduced economics merely to a theory of
value: Robbins’s definition restricts the scope of economics by treating
it as a positive Science only while in reality it is both a positive and a
Scope of economic has been widened:
Robbins’s definition has widened the scope of economics by covering the
whole of economic life, while it is concerned with that part of human life
which is connected with the market price.
Economics has become a colorless science:
Robbins’s made economics colorless, impersonal and abstract. It is in fact a
definition of economics for economist only.
Study of economic growth: The study of
economic growth process remains outside the scope of economics while it is
through economic growth that living standards improve.
Summing up: The definition of economics given
by Robbins has doubt certain flaws. However, it is more comprehensive in
describing the problem of resource utilization.