Lionel Robbins Definition of Economics

Wed, 07/27/2011 - 10:30 -- Umar Farooq

Lionel Robbins Definition of Economics

After criticizing definition of economics by Alfred Marshall, Lionel Robbins (22 November 1898 - 15 May 1984) a British economist gave his own definition of economics in his book “An Essay on the Nature and Significance of Economic Science” published in 1932. Lionel Robbins has given scarcity definition of economics in these words,Economics is a Science that studies human behavior as a relationship between limited resources and unlimited wants which have alternative uses”.

Lionel Robbins claimed that his definition did not suffer from any of these defects. Lionel Robbins definition was analytical rather than classificatory. Instead of discussing a certain type of human behavior, it focused its attention on a particular aspect of human behavior that is behavior concerned with the scarcity of resources and unlimited wants.

Major Points of Lionel Robbins Definition of Economics

Following are the points:

  1. Ends (Unlimited Wants)
  2. Means (Scarce Resource)
  3. Alternative Uses

1. Ends (Unlimited Wants)

Human beings have unlimited wants. They are constantly making efforts to satisfy unlimited wants with limited resources. The nature of these unlimited wants is such that if one want is satisfied another want arises. It is impossible that a person has all of his wants fulfilled. So the struggle to produce more goods or get more income continues for the whole life.

2. Means (Scarcity of Resources)

Resources are of two types, non-economic and economic resources. Non-economic resources are air, sea, water etc. These resources are unlimited in supply and are fee. Economic resources are the things and services which are limited or scarce in supply and command a non-zero price. Economics is concerned with all the natural human and manmade resources that are used in the production of goods and services. These resources are also called inputs.

According to Robbins the unlimited ends and the scarce resources provide a foundation for the field of economics. Since the human wants are unlimited and the means to satisfy them are scarce or limited in supply, therefore an economic problem arises. If all the things were freely available to satisfy then unlimited human wants there would not have arisen any scarcity hence no economic goods, no need to economic and no economic problem.

3. Alternative Uses

The third important proposition of Robbins definition is the scarce resources available to satisfy human wants have alternative uses. For example if a piece of land is used for the production of sugarcane it cannot be utilized for the growth of another crop at the same time. Man therefore, has to choose the best way of utilizing the scarce resources which have alternative uses and choices are the problems confronting to the society. The choices to be made are

  • What goods shall be produced and in what quantity?  
  • How the goods and services should be distributed

Summing up, the definition of economics by Robbins based on satisfaction of human wants with scarce resources which have alternative uses.

Criticism on Robbins Definition of Economics

Robbins definition of economics criticized by some modern economists like Hicks, Durbin, Frazer on the following grounds

1. Make Economics a Pure Science

According to Prof. Robbins economics is a pure science and has not normative aspect. We agree with when he says that “Economics is something more than Science” Mrs Woolen says “It is very difficult for economists to divert their discussions of all normative significance”. Robbins definition becomes colorless, impersonal.

2. Human Touch is Missing

In Robbins definition human touch is entirely missing. We agree with more than  science, shot through with the infinite variety of human life, calling not only for systematic thinking but for human sympathy, imagination and in an unusual degree in the saving grace of common sense.

3. Valuation Theory

It is objected that Robbins has reduced economics merely to valuation theory. According to Frazer, Robbins reduced economics merely to a theory of value but is much more than that.

4. Ignores Macro Aspect

Another criticism is that it ignores the macro aspect of economics, Keynesian economics which studied how the level of national income and employment are determined. So Robbins fails to explain the problems of overpopulation unemployment economic growth and national income.

5. Self Contradictory

Robbins definition is based on self contradictory. He favored Laissez-fair-policy. Frazer has rightly pointed out that if Robbins admits that he clearly does, that it is an objection to a given way of achieving a purpose that it is an uneconomical then he is implying that economy as an end, that waste is bad

But all these criticism are based on misunderstanding of what Robbins says. All he says is ends must be determined by those who wish to fulfill them. He does not undermine the selection of right kinds of end, but only leaves it to the concerned to decide what the right kind of end is for them. This is so because ends involves question of value and everyone must follow his own system of values.