Alfred Marshall’s definition of economic, Its features and criticism

Alfred Marshall’s definition of economic, its features and criticism

The neo-classical view: Welfare Definitions-Neo-classical economists focused more on welfare and the emphasis was shifted from ‘wealth’ to ‘welfare’. According to Cannan, “The aim of political economy is the explanation of the general causes on which the material welfare of human beings depends.”
According to A.C. Pigou,” Economics studies that part of social welfare which can be brought directly or indirectly in relation with measuring rod of money.”

Alfred Marshall in his book, “Principles of Economics”, published in 1890, describes economics as, “It is the study of mankind in the ordinary business of life; it examines that part of the individual and social action which is most closely connected with the attainment and with the use of the material requisites of well- being. Thus, it is on the one side a study of wealth; and on the other, and more important side, a part of the study of man”.

The important features of Marshall’s definition are as follows:

Economics is the study of human beings-  Economics explores how an individual gets his income and how he uses it through which the human welfare can be promoted.

Economics not only studies wealth-achieving activities but also studies wealth-consumption activities.

Economics deals with ordinary men who are rational. It studies the activities of normal man who are living in the society and influenced by all natural instincts such as love, and affection.


Activities of abnormal man like drunkards, gamblers, drug addicted and isolated person’s activities are not included in the scope of economics.


Economics studies only a part of those activities which is related to material welfare: Marshall makes a distinction between material and immaterial things. Material things are those that can be seen, felt and touched, such as books, chair, etc. Immaterial things are those that cannot be seen, felt and touched such as services of a doctor, teacher, etc. according to him, Economics does not study all types of human activities but only a part of those activities related to material welfare.

Economics is a Social Science, which attempts to study the ordinary business of life of the persons living in society and influencing each other. ordinary business of life of a person refers to the activities of earning and spending the income for the welfare of human beings.


It emphasizes more on human welfare and considered wealth simply as a mean for human welfare.

Economics is a normative science according to Marshall. It deals with what should be and what ought to be.


Criticism: This definition has also been criticized by Lionel Robbins.

According to him, it only confines its study to the material welfare and ignores non-material aspects of human life. It was difficult to separate material and non-material aspects of welfare. For example, the services of lawyers, dancers, teachers, doctors, engineers and professors satisfy human wants and are scarce in supply. 


The activities relating to the ordinary business of life is unclear and vague because Marshall didn’t clear properly what activities of man come under ordinary business of life and which activities are outside its area. According to Prof. Robbins, there are several such activities that don’t fall under an ordinary business of life, yet are studied in Economics, like – the study of the economy at the time of war.

Robbins said the science of economics studies several activities, that hardly promotes welfare but are looked at as economic activities. For instance,Production and consumption of alcohol and other intoxicants as drugs, cigarette are not beneficial for human welfare, but it might generate wealth.

Marshall has divided human activities into two parts, Economic and Non-economic, which is not fair because a similar activity of a man can be economic and non-economic also at different times. For example, cooking in his own house by a cook is a non-economic activity while cooking in the hotel by the same cook. becomes an economic activity.

Marshall’s definitions have restricted the scope of Economics by confining it only material, ordinary and economic activities


According to Robbins, economics should be regarded as a human science instead of social science because it studies human behavior as a relationship between ends and scarce means which have alternative uses.

Dr. Swati Gupta

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