Criticism of Marshall's statement:

There is no doubt that Marshall’s statement is a great enhancement over the statement of Adam Smith. For its emphasis is on social troubles. And economics is a social science. Furthermore, it tells us about the link among wealth and welfare. However the main idea of Marshall that economics is a science which deals with material welfare has been strongly criticized. Lionel Robbins is an enormous critic of this statement. He says that Marshall’s statement mis-represents the science of economics.

At first, when we go by the definition of Marshall, in economics we must consider only those activities that promote material welfare. However many activities do not promote welfare although are rightly considered as economic activity. For illustration, we know that alcoholic drinks and cigarettes are bad for our health. But such commodities are generated and sold. There is a market for them. And there are sellers and buyers. Hence the production and distribution of such goods is economic activity. Let us take another illustration. War does not encourage material welfare. However we have “economics of war”. And it is a significant branch of economics. There are many economic troubles with regard to war. At times, the economic causes of war are more significant than the political and social causes. Therefore it is not right to say that economics studies material well-being.

Secondly, some activities promote well-being however not material welfare. For illustration, the activities of lawyers, doctors, actors, musicians promote our welfare. However their labor does not consequence in the production of material goods. When we follow the material welfare statement of economics, we can’t consider the activities of the above categories of labor as economic activity as they do not promote material welfare. However we make utilization of their services. We pay a price, at times very high price, for their services. Their services contain economic value. It is misleading to elucidate economics as the study of the causes of material welfare. In the words of Lionel Robbins, “whatever economics is regarded with, it is not concerned with the cause of material welfare as such”.

Third, Marshall’s definition is classificatory and is not analytical. It considers the production of material goods (example, tables, chairs, cycles and cars,) alone as economic activity. Since the services of a teacher or a judge do not generate material goods, they are not considered as economic activity. This is a mistaken view. As Lionel Robbins says, “we do not say the manufacture of potatoes is economic activity and the production of philosophy is not”.

Lastly, by introducing ethical concepts such as welfare, economics will become an inexact science. For it is instead difficult to measure welfare. And some economic policies that promote the welfare of some people might affect the welfare of others.

Despite of the above criticism against Marshall’s definition, we must not forget that Marshall has broadened the scope of economics by establishing a link among wealth and man and his welfare.

Modern definitions of economics depend on the theory of scarcity and choice.

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