Welfare

Accepting that the wealth definition of economics was incomplete and defective, another famous English economist Alfred Marshall gave a new definition of economics.

In his famous book ‘Principles of Economics’ published in 1890, Marshall diverted the attention of economists and social philosophers from ‘wealth’ to ‘welfare’. The followers of Marshall like Pigou, Cannan accepted and propagated his definition. Since Marshall and Pigou were the neo-classical economists, their definition. Since Marshall and pigou were the neo-classical economists, their definition was also known as Neo-classical definition of economics.

According to Marshall, “Political Economy or Economics is a study of mankind in ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of material requisites of well-being.”  Marshall again points out that economics is on one side a study of wealth, and on the other, and more important side, a part of the study of man.

If we analyse Marshall’s definition, we come across the following main features.

• Economics as the social science is study is the study of human activities in the society.
• It studies human activities connected with the acquisition and use of material goods.
• Material goods are used for human welfare. So material good (wealth) is a means, welfare is the end.