Adam smith is a Scotland
He
has defined economics as the science of the wealth in his book .According to
him,” Prosperity of the individuals constitute the prosperity of the nation.
Gain of wealth or after acquiring the man can achieve his satisfaction”
Therefore,
Economics is a science which deals with wealth. Economics provides the guide
lines to the individuals and society or nation.
Several great economists such as
J.B.Say, David Ricardo, J.S. Mill etc. supported and followed Adam smith
definition. So, they are called classical economists.
Criticism
of the Adam smith definition
·
Narrow
definition
Adam
smith considered that economics is the science that deals only with wealth and
material goods. Contrary to this concept, the critics pointed out the economics
studies not only material goods and wealth but also some non-material things
such as services of doctors, teachers, engineers which also fulfill human needs
and wants. Therefore, services produced by professional human resources also
constitute important aspects of wealth. Therefore, services rendered by people
should also regarded as a part of wealth.
·
Unnecessary
emphasis on wealth
Adam
smith highly emphasized the importance of wealth in economic life rather than
human beings. He assigned primary role to wealth and only secondary place to
mankind. On the contrary, the critics pointed out that human life cannot be
sacrificed for wealth rather wealth should be used for the betterment of
mankind.
·
Single source
of wealth
In
the view of Adam smith, the amount of wages that is earned by employed
labourers could be the only one sources of wealth of a nation. The critics of
the definition are however of the view that natural resources, human resources,
capital resources and physical resources also as sources of wealth. All these
resources put together can be utilized to earn maximum wealth by nation.
·
Assumption of
economic-man is wrong
Adam
smith assumed that every human being who wants to earn money by hook or crook
is known as an economic man. The critics of the definition instead point out
that almost all human beings also own the qualities of human life such as
feelings of love, respect, self-esteem, sympathy, co-operation, friendship, trust which
might provide greater satisfaction rather than wealth in their lives.
