Economics as a science of material welfare (Alfred Marshall)

Alfred Marshall’s definition of Economics (The Neo-classical view)

The neo-classical school by Dr. Alfred Marshall gave economics a respectable place among social science. Marshall was the first economist who lifted economics from the bad repute it had fallen. Dr. Alfred Marshall (1842- 1924) in his book “Principles of economics” defined Economics as a “study of mankind in the ordinary business of life; it examines that part of individual and social actions which is closely connected with the attainment and with the use of material requisites of well-being.” This definition clearly states that Economics is on the one side of man. Marshall’s followers like Pigou Cannon and Baveridge (The Neo-classical writers) have also defined economics as a “study of causes of material welfare” for example, according to Cannon, the aim of Political Economy is the explanation of the general causes on which the material welfare of the human being depends.

Criticism of material welfare definition:-

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(1): Narrows down the scope of economics:

According to Robbins, the use of the word “material” in the definition of economics considerably narrows down the scope of Economics. There are many thing in the world which are not material but they are very useful for promoting human welfare. For example, the services of doctors, lawyers, dancers, engineers etc. satisfy our wants and are scarce in supply. If we exclude these services and include only material goods, then the sphere of economics study will be very much restricted.

(2): Relation between economics and welfare:

The second objection raised by Robbins on welfare definition is on the establishment of relation between economics and welfare. According to him, there are many activities which do not promote human welfare, but they are regarded economic activities. E.g. the manufacturing and sale of alcohol goods or opium etc. Here Robbins says, “why talk of welfare at all? Why not throw the mask altogether?”

(3): Welfare is vague concept:

The third objection levied by him was on the concept of ‘welfare’ in his opinion welfare is a vague concept. It is purely subjective. It varies from man to man, from place to place and from age to age. Moreover, he says that what is the use of a concept which cannot be quantitatively measured and on which two persons cannot agree as to what is conducive to welfare and what is not. For examples, the manufacturing and sale of guns , tanks and other war heads, the production of opium, liquor etc are not conducive to welfare but these are all economic activities. Hence, these cannot be excluded from the study of economics.

(4): Impractical:

The definition of welfare is of theoretical nature. It is not possible in practice to divide man’s activities into material and non-material.

(5): It involves value judgment:

Finally the word “welfare” in the definition involves value judgment and the economists according to Robbins, are forbidden to pass any verdict.