Thursday, March 15, 2012

Nature and Scope of Economics

Many writers of the early days defined economics as "a science of wealth". Adam Smith generally know as the father of modern economics, defined economics as "An enquiry into the nature and causes of wealth of nations."

These definitions were defective because they gave much point to wealth. As wealth is not everything, it only leads to perform welfare of human. Therefore it is man an which is the aim all of the economic activities.

Globalization Definition

Professor Dr. Alfred Marshall was the first economist who gave a logical definition of economics. He defined economics as: "A study of mankind in commonplace enterprise of life, it study that part of personel and collective actions which is intimately related with attainment and use of material requisites"

Nature and Scope of Economics

Rise of The Network Society (Information Age Series) (Vol 1) Best

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Rise of The Network Society (Information Age Series) (Vol 1) Overview

This book is an account of the economic and social dynamics of the new age of information. Based on research in USA, Asia, Latin America, and Europe, it aims to formulate a systematic theory of the information society which takes account of the fundamental effects of information technology on the contemporary world.

The global economy is now characterized by the almost instantaneous flow and exchange of information, capital and cultural communication. These flows order and condition both consumption and production. The networks themselves reflect and create distinctive cultures. Both they and the traffic they carry are largely outside national regulation. Our dependence on the new modes of informational flow gives enormous power to those in a position to control them to control us. The main political arena is now the media, and the media are not politically answerable.

Manuel Castells describes the accelerating pace of innovation and application. He examines the processes of globalization that have marginalized and now threaten to make redundant whole countries and peoples excluded from informational networks. He investigates the culture, institutions and organizations of the network enterprise and the concomitant transformation of work and employment. He shows that in the advanced economies production is now concentrated on an educated section of the population aged between 25 and 40: many economies can do without a third or more of their people. He suggests that the effect of this accelerating trend may not be mass unemployment but the extreme flexibilization of work and individualization of labor, and, in consequence, a highly segmented social structure.

Rise of The Network Society (Information Age Series) (Vol 1) Specifications

The Rise of the Network Society, the first volume in a trilogy collectively known as the Information Age, has earned Manuel Castells comparisons to such illustrious social critics as Max Weber and Karl Marx. Just as they worked to make sense of industrial capitalism, so does Castells put forth a systemic analysis of the global informational capitalism that emerged in the last half of the 20th century. While many books have considered the development of increasingly sophisticated information technology, the shifting conditions of employment and responsibility within corporations, or the rise of corporations whose domains are spread out over several nation-states, Castells unites these topics in a comprehensive thesis, negotiating the tightrope between academic sociology and mainstream business analysis.

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Characteristics Of Definition:

This definition gave a new direction to the study of economics. Following are the important characteristics of definition.

1. A collective Science

This Definition makes economics a collective science. It is a branch that is involved with the citizen living in society. Agreeing to Marshall, as the behavior of human beings is not same all the time therefore law of economics cannot be formulated like the laws of sciences. Supplementary laws of economics are not as exact as the laws of natural sciences. For this reason it is a collective science.

2. Study Of Man

Economics is related to man; therefore it is living subject. It discusses economic problems and behavior of man. Agreeing to Marshall it studies the behavior of man In commonplace enterprise of life.

3. Wealth As A Means Of Material Well Being

According to Marshall, wealth is not the extreme objective of human activities and therefore we do not study wealth, for the sake of wealth. Therefore Agreeing to this definition we study wealth as a source of attainment of material welfare.

4. Economics And Welfare

This definition makes economics a welfare oriented subject. We are involved only with those economic activities which do not promote material welfare of human beings are out of the scope of economics.

5. Materiality

Marshal stresses upon the view of "material considerable of well being". Therefore Agreeing to this definition all economic activities determine colse to the acquisition and use of material goods like food, clothing etc. Because they increase welfare of human beings. On the other hand non-material requisites of human life like education, recreation are ignored.

6. Normative Outlook

According to this definition economics should take care of good and bad aspects of economic activities and therefore involve itself in "what should be and what should not be". This is called normative aspect of economics.


"Robbins and other many economists severely criticized this definition on following grounds."

1. Microscopic To Material Welfare

This definition limits the branch of economics to material welfare of people. But the branch of economics is not Microscopic to the study of material welfare of human beings. In reality both material and non material aspects of wellbeing are studies in economics.

2. Vague view of Welfare

The view of welfare used in this definition is also not clear. The welfare of human beings is not Microscopic to the attainment of material requisites. There are many other factors which influence the human welfare. Supplementary the word "welfare" has distinct meaning for distinct persons and distinct societies. Therefore we cannot define economics using an unclear view of welfare.

3. Microscopic Scope

This definition has made the scope of economics limited. Only those activities are studied in economics which are aimed at the attainment of material requisites of well being. Supplementary it ignores the economic activities of a person not living in society. Attainment of non material requisites of human well being fall out of the scope of economics. This division of material and non material aspects of human welfare is not correct.

4. Economics And Welfare

According to Robbins the study of economic activities on the basis of welfare is not good. It is not the duty of an economist to pass verdict that what is conducive to welfare and what is not. Thus Agreeing to Robbins "Whatever Economics is involved with, it is not involved with causes of material welfare as such.

5. Moral Judgment

In this definition Marshall makes economics a branch which considers the right and wrong aspect of economic activities. Agreeing to Robbins economics in neutral as regards ends and it is not the function of an economist to pass moral judgments and say what is good and what is bad.

6. Unrealistic

This definition appears to be unrealistic as we analyze it critically. The unclear view of welfare, the division of ends into material and non material, the stress on good and bad, the view of man living in society etc. All these concepts put unnecessary restrictions and make the scope of economics limited. These ideas make the definition unrealistic.


Although this definition gave a new direction to the branch of economics but it had many weaknesses. Some of the faults of definition are discussed above. For these reasons this definition was replaced by other new definitions of economics.

Nature and Scope of EconomicsJoyce Appleby on the History of Capitalism Tube. Duration : 7.35 Mins.

Joyce Appleby, author of The Relentless Revolution, chats with Swati Pandey about how capitalism began and how it spread.

Keywords: Zócalo, public square, joyce Appleby, the relentless revolution, capitalism, globalization, economy, swati pandey

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