Adam Smith and his distinguished followers called classical economists defined economics as a science of wealth. Adam Smith (1723 – 1790) in his famous book “An Enquiry into the Nature and Causes of the Wealth of Nations” described economics as a body of knowledge which relates to wealth. According to him if a nation has large amount of wealth, it can help in achieving its betterment. Adam Smith defined economics “as the study of nature and causes of generating of wealth of a nation.” Adam Smith emphasized the production and expansion of wealth as a 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. J .B. Say, a French classical economist, described economics as “the science which treats of wealth”. J. S. Mill another classical economist in the middle of 19th century looked upon economics “as the practical science of production and distribution of wealth”. According to Malthus “Man is motivated by self interest only. The desire to collect wealth never leaves him till he goes into the grave”. The main points of the definitions of economics given by the above classical economists are that (1) economics is the study of wealth only. It deals with consumption, production, exchange and distribution aspects of wealth. (2) Only those material goods which are scares are included in wealth.
Criticism of the definition:
The definition 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”. Ruskin called Adam Smith as the “half bred and half witted man”. The main criticism levied on these definitions is as under:
- Too much important to wealth. The definitions of economics given by classical economics give primary importance to wealth and secondary importance to man. The fact is that the study of man is more important than the study of wealth.
- Narrow meaning of wealth. The word “wealth” in the classical economists’ definitions of economics means only material goods such as chair, book, pen etc. These do not include nonmaterial goods such as services of doctors, nurses etc.
- Concept of economic man. According to wealth definitions, man works only for his self-interest social interest is relegated in the background. Dr. Marshall and his followers were of the view that economics does not study a selfish man but a common man.
- 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 activates.
- 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 or recourses which are scarce for the earning of wealth.
- Defective Logic. The definitions of economics given by classical economists were unduly criticized by the literary writers of that time. The fact is that what Adam Smith wrote in his book. “Wealth of Nations” in 1776 even now is widely accepted. 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” a clear meaning, therefore the definition of 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.
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