NATURE AND SCOPE OF ECONOMICS

Alternative uses: Means are not only scarce; they have alternative uses as well. That makes the problem more acute. And consequent economic problems more severe. For example, if coal had only one use, it would have been less scarce. But the alternative uses of coal are many. It becomes scarce. Coal is used for cooking, in railways, factories, thermal plants, steel plants and in so many other ways.

Criticism of Robbins Definition: Robbions definition is based on two foundation stones-multiplicities of wants and scarcity of means. But this definition is criticized by Souter, Lindley Fraser, Barbara Wootton, T.Parson for ignoring the normative aspect of human behavior and for making economics an obscure science According to D.H. Robertson the definition is too narrow because it excludes such topics as defects of economic organization which lead to idle resources. The Robbions has not discovered anything new.

Nature of Economics: Economics is science or art? Science is systematized body of knowledge based on observation and experiment. The practical knowledge of this knowledge is called an art. Science establishes relationship between cause and effect. Here the facts are systematically collected, classified and analyzed. In this sense economics is also a science. Here certain generalizations are made regarding human behaviors which establish the relation between cause and effect. A definite result is expected from a definite cause as is the cause as is the case with all scythe definition of Economics given by Lionel Robbins is more exact and precise. According to Lionel Robbions, Economics is the science which studied human behavior as a relationship between ends and scarce means which have alternative uses.

This definition has three essential points, unlimited wants or ends: Man by nature is such that his wants are unlimited. If one want is satisfied, another takes its place. However, all wants are not equally important. Some are urgent than others. So wants can be graded in order of their importance and depending upon the availability of resources, the more urgent wants are satisfied first.

Scarce means: Means refer to all those resources with satisfy our wants. It includes, besides resources, time energy and money. If the means were not scarce, there would have been no economic problems. Scarcity of means however is not absolute. It is relative scarcity i.e. scarcity in relation to their demand. nces. For example according to the law of demand at a lower price and less is demanded at a higher price. Here price is the cause, expansion and contraction of demand is the effect.

But economic laws are not as exact as scientific laws. They do not possess universal validity and are not capable of exact quantitative measurement. Economics is unable to predict future course of events accurately. Experimental verification of scientific laws is possible but there is little scope for experiment action in economics it studies human behavior which is unpredictable and which changes from person to person and place to place and from time to time. This is why economic laws are based on several assumptions and have exceptions and limitations. However, this does not mean that economics is not a science. In Economics too, we have a measuring rod, which is Money. It also uses a scientific method. If its laws are not exact and if economics cannot predict future events accurately, the fault does not lie with the subject. Economics deals with highly complex and variable forces like human behavior. Therefore, Economics cannot be denied the status of science.