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History of Economics

Economics has its origin in Greece, in the writings of

Plato and Aristotle.
Aristotle wrote a book named “Economica” in 2500
History of Economics
In 500 B.C. that Kautilya ancient Indian thinker who
was a scholar at Takshashila and the teacher and
guardian of Chandragupta Maurya, founder of
the Mauryan Empire wrote the book Arthashastra
which deals with treatise on statecraft, economic policy,
military strategy and with profit and earning of the State
written in Sanskrit.
History of Economics
Under the name of 'Vishnugupta' (Viṣṇugupta)
or Vishnu Sharma's Panchatantra in the 3rd century BCE.

With the name Chanakya (Cāṇakya c. 350–283 BC).)

he worte Kamsutra(c.350–283 BC) in the area of
Medicine. The text was influential until the 12th
century, when it disappeared.
• It was in 1776, when Father of
Economics “ADAMSMITH” wrote a book
take its birth.
• The world “ECONOMICS” was derived from
the Greek words “Okios” + “Nomos or



ECONOMICS = House Hold Management

Definition is the art of limiting contents of a
subject within the range or circle of specific
words and terms.

It is neither possible nor desirable to start

studying a subject before getting familiar
with its definition, although
sometimes it is indeed very difficult to
select a single, all-inclusive and
satisfactory definition.
Wealth centred Wantlessness Scarcity
Definition Definition Centred

Five Types of Definitions of Economics

Welfare Centred Growth Centred

Definition Definition
Wealth Centred definition

According to Father of
Economics Adam Smith,”
Economics is the science
which treats wealth.”
• According to Prof.Walker
“Economics is that body of
knowledge which relates to
Characteristic of wealth
centred definition
Classical economists have considered
wealth as beginning and end
objective of the study of economics
Classical economists confined their
study only to those persons who are
directly concerned with economic
Classical economists have imagined
an economic man.
Characteristic of wealth
centred definition
 In classical definition, problem of scarcity
and choice is neglected.
 In classical definitions, there is no
discussion that what means should be
adopted for accumulation of wealth.
 In these definitions no importance has
been given to human welfare.
• According to Marshall
“Economics is a study of man’s action in the
ordinary business of life, it enquires how he gets
his income and how he uses it…..thus it is on
the one side study of wealth and on the other
and more important side, a part of study of
• According to Cannon," Economics is the study
of the cause of material welfare.”
• In the views of Penson,”Economics is
the science of material welfare.”

• In the views of Pigou,”Economics is

the study of economic welfare, being
described as that part of welfare
which can be brought directly or
indirectly into relation with the
measuring rod of money.”
Characteristics of welfare centred

Economics is study of Normal, Social and

Real man.
Economics is study of wealth but it is
more a study of man.
Economics is study of economic activities
Economics studies material requisites of
well being
Economics not only deals with
individual efforts but it also studies
the activities of human which he
performs as a member of society.
According to these definition
economics is both science as well as
These definitions are classificatory
which divides economic activites of
people in two parts:-common and
uncommon, welfare and non welfare.
• In 1932 after criticizing Marshall's
definition Lord Robbins gave his own
definition in his book "An essay on the
nature and significance of Economic
Science” .
• "Economics is the science that studies
human behaviour as relationship
between ends and scarce means which
have alternative uses.”
Characteristic of scarcity centred
• It is a scientific definition.
• It is an analytical definition.
• This definition states that economics
is pure science and it is positive one
rather than normative one.
• This definition has wider scope as it
includes all activites whether good or
bad, moral or immmoral,ethical or
Characteristic of scarcity centred
• Economics is neutral as regards ends.
• Robbins definition is universal definition
of economics as it is concerned with
problem of unlimited wants and scarce
• This definition has widened the scope of
economics. In economics, economic
activites of man related to all kinds of
scarce means are studied.
• Modern economists like Keynes and
Benhem consider Robbins definition as
incomplete because it do not take into
consideration the changing and widening
nature and content of Economics. Modern
economists have given many definitions:-
According to Keynes, “In economics we
study the administration of scarce resources
and determinants of employment and
• According to Milton Friedman,
“Economics is the science of how a
particular society solves its economic
problems. An economic problem exists
whenever scarce means are used to
satisfy alternative ends.”

• According to Boulding, “Economics is a

scientific study of economic quantities.”
Growth Oriented Or Modern Definition

“Economics is the study of how Men

and society choose, with or without
the use of money, to employ scarce
productive resources which could
have alternative uses, to produce
various commodities over time and
distribute them for consumption now
and in the future, various people and
groups in society.”
Prof. Paul Samuelson
Characteristics of the Definition

Production of Different goods in a

Fixed Time Period.
Distribution of Production at present
and in future .
Development and Change of
Determinants of employment, Income
And Economic Development.
Efficiencies and In-efficiencies of
• In the words of M.K. Gandhi,“ The
human mind is like a restless bird, the
more it gets, the more it wants and still
remains unsatisfied”.
So, If there is increase in desires, it will
create problems for human beings.
• In the words of J.K Mehta, "Economics is
the science of human activities considered
as an endeavour to reach the state of
Characteristics of definition
• Economics is Science
• Only human activities are considered
in Economics
• Objective of Economics is to achieve
the state of Wantlessness .
• Economics is a Science as well as an Art
which study how Men and society choose,
with or without the use of money, to
employ scarce productive resources which
could have alternative uses, to produce
various commodities over time and
distribute them for consumption now and
in the future , various people and groups
in society.”
Question Bank
1) What do you mean by term definition?
2) In how many classes the definition of
economics can be divided?
3) Who is the father of economics?
4) Give the name of the book written by Lord
5) Give any two characteristics of wealth centred
6) To which category of definition Marshall and
Pigou belongs to?
7) Give definition of Robbins in your words?
8) Name any two modern economists?
9) To which category of definition Keynes belongs
10) Give Gandhian views regarding wantlessness