Adam Smith Definition of Economics

 Adam Smith's definition of Economics... 

Adam Smith, founder of modern economics and the leader of classical economists developed economics as a separate social science. So he is regarded as a father of Modern Economics. He wrote a book on the subject named " An Enquiry into the Nature and Causes of the Wealth of the Nations " which was published in 1776AD. This book is regarded as the holy book of economics and popularly know as'The Wealth of Nations'. The name of the book is itself sufficient to understand what economics is and the subject matter does it cover. 

       

          According to him, economics is the study of the nature and causes of the wealth of the nation and it is concerned with production and increase of nation's wealth. The term wealth means sufficient money resources. This definition was supported by various classical economists like J. B. Say, J. S. Mill, F. A Walker, David Ricardo, Thomas Robert Mathus etc. According to J. B Say, "Economics is that science which trades of wealth".

            Following are the main features or characteristics of Wealth Definition..... 

1. Economics is the study of wealth only. It deals with consumption, production, exchange and distribution of wealth. 

2.Only material commodities are included in wealth which are scarce and useful. 

3. Economics studies only those activities which were performed by economic man. 

4. The ultimate goal of human beings is to earn wealth because it is only the means of satisfying human wants. 

5. The definition gave primary importance to wealth and secondary importance to man in the study of economics i.e the subject matter of economics is wealth.      

6. Wealth depends upon the productivity of labour which can be increased through division of labour. 

  Criticism. . . .. 

The wealth definition given by Adam Smith and his followers has been too much criticized by various economists under the following points:-

1. More emphasis on wealth: According to classical approach, wealth is considered as it was everything. But criticis of the theory claimed that wealth is necessary but not sufficient for human welfare. Therefore, primary importance has been given to man and secondary importance to wealth. 

2. Economic man doesn't exist: According to this definition, economics studies only those human beings who are engaged only in consumption and production of wealth. But this type of economic man doesn't exist in the society. 

3. Non- material wealth: This definition covers only the material things as wealth but the non material activities of teachers, doctors, lawyers etc by which material things can be exchanged also included in wealth. 

4. Narrow scope: According to this definition, the subject matter of economics is wealth only. So this definition narrow downs the scope of economics. 

5. Labour isn't only the source of wealth. There are several other things which increases the nation's wealth.