According to Lionel Robbins, economics studies the problems which arise because of the scarcity of resources. Nature has not provided mankind sufficient resources to satisfy all its wants. Therefore, the people have to choose for which ends or for which wants the resources are to be utilised. Thus, according to Robbins, economics is the science of scarcity and it studied how the scarce resources are allocated among their different uses. Thus he has given the following definition: “Economics is the science which studied human behaviour as a relationship between ends and scarce means which have alternative uses”
Unlimited Wants – Man’s wants are unlimited is a very important and fundamental fact of economic life of the people. If man’s wants are limited, then no economic problem would have arises. But in the real life of the people there is no limit to their wants; when one want is satisfied, another, another want crops up. An important thing to know about wants is that they are not of equal intensity; some are more intense than others.
Scarce Means – if resources are unlimited, no economic problem would have arisen because in that case all wants could have been satisfied and there would have been no problem of choosing among the wants and allocating the resources among them.
Alternative use of means – the resources can be put to various uses.
Economics is neutral between ends – economist only tells in what ways the given ends or wants can be achieved with the minimum possible resources. Task of economist is not to praise or condemn but only to analyse and explain. According to Robbins, economics is neutral between ends.
Economics is a science of choice – whenever the resources are scarce and the wants are many, the question of choice arises. Robbins remarks “When time and means for achieving ends are limited and capable of alternative application and the ends are capable of being distinguished in order of importance, then behaviour necessarily assumes the form of choice”
Professor Wicksteed says that economics is a “study of those principles on which the resources of a community should be as regulated and administrated as to secure social ends without waste”
Professor Stigler defines “Economics is the study of the principles of governing the allocation of scarce means among competing ends when the objective of allocation is to maximise the attainment of the ends”
Scitovosky says, “Economics is a social science concerned with the administration of scarce resources”
Professor Erich Roll defines “The economic problem is essentially a problem arising from the necessity of choice; choice of the manner in which limited resources with the alternative uses are disposed of. It is the problem of the husbandry of resources.... economics studies the activity of husbandry.”
Critical Evaluation of Robbins’ definition
The main charge against Robbins is that he has made economics quite impersonal, colourless and devoid of any normative element. He says equilibrium is just an equilibrium. He does not seek to make economics as study of human welfare. Therefore, many economists like Durbin, Fraser, Beveridge and Wootton have tried to defend Marshall’s idea about the true scope of economics and its objective of the promotion of social welfare. Wootton has said that “It is very difficult for economists to divest their discussions completely of all normative significance”
Various criticisms
- It is not justified on his part to oppose making economics as an engine of social welfare.
- He made economics neutral between ends.
- Professor Thomas rightly remarks “the function of the economist is not only to explain and explore but also to praise and condemn”
- It has reduced economics to a mere value theory. According to Robbins, Economics is should study only the allocation of resources among the production of various goods and consequently how the prices of goods and factors are determined. But the scope of economics is wider than the allocation of resources and the price theory.
- It does not cover the theory of economic growth and development. The theory of economic growth and development studies how national income and per capita income of a country increase over a long period of time and what factors causes such increases.
- Even the problem of unemployment which is being faced by both the developing and developed countries of the world is not covered by Robbins’ definition
- According to Professor Schultze of University of Maryland, Robbins’ definition of economics is miss leading, “in particular it does not fully reflect two of the major concerns of modern economics, growth and instability”
