Economics is the science of wealth (May 2012)

Q. “Economics is the science of wealth.” Discuss (May’12).

Some earlier economists defined Economics as follows:

According to Adam Smith- “Economics is an inquiry into the nature and causes of the wealth of the nations.’’

According to J.B. Say-“Economics is a science which deals with wealth"

In the above definition wealth becomes the main focus of the study of Economics. The definition of Economics, as science of wealth, had some merits. The important ones are:

(i) It highlighted an important problem faced by each and every nation of the world, namely creation of wealth.

(ii) Since the problems of poverty, unemployment etc. can be solved to a greater extent when wealth is produced and is distributed equitably; it goes to the credit of Adam Smith and his followers to have addressed to the problems of economic growth and increase in the production of wealth.

The study of Economics as a 'Science of Wealth' has been criticized on several grounds. The main criticisms leveled against this definition are;

(i) Adam Smith and other classical economists concentrated only on material wealth. They totally ignored creation of immaterial wealth like services of doctors, chartered accountants etc.

(ii) The advocates of Economics as 'science of wealth' concentrated too much on the production of wealth and ignored social welfare. This makes their definition incomplete and inadequate. So it is very critical to say that economics is a science of wealth or not.