Economics as a Science of Wealth/Classical
Definition of Economics By Adam Smith:
There is no one
definition of Economics which has a general acceptance. The
formal roots of the scientific framework of economics can be
traced back to classical economists. The pioneers of the science
of economics defined economics as the science of wealth.
Smith (1723 -1790), the founder of economics, described
it as a body of knowledge which relates to wealth. Accordingly
to him if a nation has larger amount of wealth, it can help in
achieving its betterment. He defined economics as:
“The study of nature
and causes of generating of wealth of a nation”.
in his famous book, “An Enquiry into the Nature and Causes of
the Wealth of Nations” emphasized the production and
expansion of wealth as the subject matter of economics.
Ricardo, another British classical economist shifted the
emphasis from production of wealth to the distribution of wealth
in the study of economics.
Say, a French classical economist, described economics as:
“The science which treats of wealth”.
in the middle of 19th century looked upon economics is
"Practical science of production and distribution of wealth”.
“Man is motivated by self Interest only.
The desire to collect wealth never leaves him till he goes into
The main points
of the definitions of economics given by the above classical
economists are that:
Economics is the study of wealth only. It deals with
consumption, production, exchange and distribution aspects
those commodities which are scarce are Included In wealth.
Non-material goods such as air, services etc., are excluded
from the category of wealth.
on the Classical Definition of Economics:
given by Adam Smith and other classical economists were severely
criticized by social reformers and men of letters of that time
Ruskin and Carlyle. They dubbed economics as a ‘dismal science’
and a 'science of getting rich'. The main criticisms on these
definitions are as under:
(i) Too much importance to wealth:
The definitions of economics give primary importance to
wealth and secondary importance to man. The fact is that the
study of man is more importance than the study of wealth.
(ii) Narrow meaning of wealth:
The word ‘wealth’ in the classical economist’s definitions
of economics means only material goods such as chair, book,
pen, etc. These do not include services of doctors, nurses,
soldiers etc. In modern economics, the word ‘wealth’
includes material as well as non-material goods.
(iii) Concept of economic man:
According to wealth definitions, man works only for his
self-interest Social interest is ignored. Dr. Marshall and
his followers were of the view that economics does not study
a selfish man but a common man.
(iv) No mention of man’s welfare:
The 'Wealth' definitions ignore the importance of man’s
welfare. Wealth is not be all and the end all of all human
(v) It does not study means:
The definitions of economics lay emphasis on the earning of
wealth as an end in itself. They ignore the means which are
scare for the earning of wealth.
(vi) Defective logic: The definitions economics given by classical economists were
unduly criticized by the literacy writers of that time. The
fact is that what Adam Smith wrote in his book ‘Wealth of
Nations' (1776) still holds well. The central argument
of the book that market economy enables every individual to
contribute his maximum to the production of wealth of nation
still not only holds good but is also being practiced and
advocated throughout the capitalistic world. Since the word
'wealth' did not have clear meaning, therefore the
definition economics became controversial. It was
regarded unscientific and narrow. At the end of 19th century,
Dr. Alfred Marshall gave his own definition of economics and
therein he laid emphasis on man and his welfare.