WELFARE DEFINITION OR NEO - CLASSICAL ECONOMICS

·         For a long time the main focus of Economics centered around Wealth for the sake of material welfare. This emphasis later shifted from Wealth to Man and his welfare

·         The major proponent of this definition has been Alfred Marshall along with other economists like Beveridge, Cannon, and Pigou

·         In the words of Marshall, "man earns money to get material welfare."Marshall rightly puts it “Economics is on the one side  a study of wealth; and on the other, and more important side, a part of the study of man”

·         Marshall says “Political Economy or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well-being”

·         The main emphasis of Marshall’s definition lays on the following four points:

1.    The primary focus is Welfare and wealth is secondary ie Wealth is sought for promoting human welfare and it is not regarded as the be all and end all of economic activities

2.    Economics is concerned with the common man ie a man who is influenced by feelings and emotions and not by one whose only motive is to acquire wealth

3.   Economics is a social science and does not consider humans in isolation. Thus he influences and is being influenced by society

4.    Economics has a materialistic aspect and it ignores non materialistic aspects

·         According to Beveridge “Economics is the study of the general methods by which men cooperate to meet their material needs”

·         Cannan is of the opinion that “The aim of Political Economy is the explanation of the general causes on which the material welfare of human beings depends”

·         Pigou states “The range of our inquiry becomes restricted to that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money”