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Nature and Methodology of Economics
MD Siyam HossainMD Siyam HossainBangladesh Institute of Business & Technology.Bangladesh Institute of Business & Technology.Narayangonj,DhakaNarayangonj,DhakaDhaka,BangladeshDhaka,Bangladeshwww.facebook.com/mdsiyamhossain
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1. Defining Economics
Study in economics should begin with definition of economicsRegarding definition following questions should be answered: What is Economics? What is the definition of economics?Regarding Definition view of the following authors should be discussed: Adam Smith (1776) Ricardo (1817) Robinson, Marshal and Lord J.M KeynesSome economists, however, have the view that: Question of definition of economy aside (Richard Jones and Comte) Defining economics is unnecessary and waste time (Pareto, Myrdal and
Hutchin) Macfie said lack of distinct definition of economics could be harmful However, students of economics must have clear knowledge definitions of
economics We must distinct idea what economics is, even it is difficult to define
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1.1 Early Definitions
Adam Smith An Enquiry into the Nature and Causes of Wealth of NationsJ.E. Cairns Economics deals with the phenomenon of wealthJ.B Say Economics as a science that treats wealth
1.1.1 Critics of the early Definitions
These definitions were harshly defied by religious leader and philanthropists
Social reformers Carlyle and Ruskin called it “pig science”
Even religiously liberal peoples saw this:
They denoted this as “dismal science” (black science), this degraded human
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1.1.2 Background of the Critics
During the time religious sentiment was dominant
Natural science was under developed
Natural calamity, epidemics and poverty dominated the society
Wealth was mal-distributed
Wealth was seen as a cause of poverty
Concentrating wealth was termed as immoral and sinful
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2. Marshallian definition of Economics Marshal called economics as a study of wealth and man “Economics is the study of the general methods by which men co-operate to
meet their material needs and welfare.” The aim of the political economy is to explain on which the material welfare of
human being depends Marshal definition was termed as welfare definition of economics
This definition emphasis on the following points:
Wealth is source for human welfare
But wealth is referred to second position
Economics deal with general peoples
Marshal definition consider human with love, and affection
Motivation and desire to maximise profit is not given proper emphasis
Economics, however, prerequisites of material welfare
And encourages materialistic philosophy of life
In practical world Economics ignores non-materialistic aspect of life
Marshal regarded economics as science and imperfect art
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3. Robbins’ definition of economics
Robbins tried to free the definition of economics from welfare philosophy
He said, “Economics is a science which studied human behaviour as a relationship between wants and scarce means which have alternative uses”
Robbins definition has following assumptions: Endless wants are the source of all economic activities
If there is no want, economic activity is bound to cease
Wants are unlimited but the means to satisfy wants is strictly limited
Had the means of satisfaction unlimited, no economic problems have arisen
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Robbins definition has following superior considerations
Consider all material and non-material wants
Consider well being of the peoples
Does not confine economics on wealth and related activities
Robbins considers economics as science
Limitations of Robbins definition
Economics cannot deny its responsibility for human society
Robbins definition does not include the theory of growth
It does not explain the problem of unemployment
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3. Modern Definition
Lord J.M Keynes Economics is study of the administration of scarce resources and
of the determination of income and employment
Benham Economics is “a study of the factors affecting the size,
distribution and stability of a countries national income.”
Significance of Modern Economics Compare to earlier definitions revolution has been made in
economic thinking Growth has got central importance in the definition of the
economics Stability in economic development