But Robbins has nothing to do with Ethics. It is as much applicable to a Robinson Crusoe economy as to a communist economy and a capitalist economy. State monopolies under socialism is more dangerous than under capitalism. It goes on revising its conclusions in the light of new facts based on observations. Capitalism is self regulating and works automatically through price mechanism. Second, economics being a social science, economic theories are influenced by social and political factors. It is “a systematised body of knowledge which gives its proud possessor a framework within which to analyse the problems associated with the study.” Like other pure sciences, economics is neutral between ends. Offer incentives for efficient economic decisions and their implementation. 8. Economics deals with the pricing of their services, equally with the pricing of the services of a cook.” He therefore, concludes: “Whatever Economics is concerned with, it is not concerned with the causes of material welfare as such.”. A discussion about the true scope of economics includes the subject matter of economics, whether economics is a science or an art, or is it a positive or a normative science. 7. On the other hand, the problem of allocating scarce means among given ends is such that it may arise even in fields which lie outside the jurisdiction of economics. Marshall, Pigou, Hawtrey, Frazer and other economists do not agree that economics is only a positive science. Capital intensive technique(Machines as inputs for production). This is due to the following reasons. To examine a problem in its right perspective, and. It is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources & the interaction among these individuals and firms. And for a good or service to command a price, it is not essential that it must promote material welfare, rather it must be scarce and capable of being put to alternative uses. What provisions to be made for future economic growth? But the subject matter of economics grows apace.” The continuous growth in the subject matter of economics has led to divergent views about the scope of economics. To analyse the causes and effects of poverty falls within the purview of science and to lay down principles for the removal of poverty is art. Despite various similarities with Robbins’s definition, it is an improvement over his scarcity definition and is also more comprehensive and realistic than the earlier definitions. This will, in turn, react on the effectiveness of the corresponding art. Of the two definitions of welfare and scarcity, it is not possible to say with precision which is better than the other. Economics not a Social Science but a Human Science. ->chosen in an economy where, capital    price of capital. Multiplicity of wants makes it imperative for human beings to work ceaselessly for their satisfaction but they are unable to satisfy all. Since the predictions of economics can be tested, economics is a positive science like physics which should be free from value judgements. Bailey called it “a mean, degrading, sordid inquiry.” To Carlyle it was a “pig-science.” Ruskin lamented in the Preface to his Unto the Last that economists were in ”an entirely damned state of soul.” Even economists like Jevons and Edge-worth were despaired of this wealth-oriented conception of economics. They are subject matters and nature of economics. Economics is thus concerned with human beings who act irrationally and there is no scope for experimentation in economics. Distinction between Material and Non-material Things Faulty. Since competition is absent, there is no wastage of resources on advertisement and sales promotion. The major macro economic factors are related to:-. In such a situation, there is little need for defining economics as the study of the causes of material welfare. Operational issues, in relation with product decision ,pricing and sales promotion, financing and management of investments etc.. that arise within the organization and fall within the purview and control of management. Thus economics claims to be a positive science like any other natural science. Excessive materialism leads to environment degradation. The economic conditions of a section of people. Concept of Economic Welfare Vague. (iii) Factors that Micro Economic theory deals with: 6. This interpersonal comparison of utility implies value judgment, which transports economics to the realm of Ethics. Freedom of running enterprises by individuals, Consumer Sovereignty, consumer is the king here, Competition feature results in efficient use of resources. An example of a principle in chemistry is that, all other things being equal, a combination of hydrogen and oxygen in the proportion of 2: 1 will form water. Robbins also objects to the use of the word welfare along with material. of the nation. It has nothing to do with a Robinson Crusoe economy. A barter economy has also to face the problem of scarcity or means in relation to ends. The level of employment and rate of economic growth. The services of teachers, lawyers, actors, etc. “A society cannot satisfy each and every want of all the people”. in the process of Business Decision Making.

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