Critically examine the wealth definition of economics

Asked by xyzranjeetkr | 23rd Apr, 2019, 09:01: PM

Expert Answer:

The famous book ‘An Inquiry into the Nature and Causes of Wealth of Nations’ was written by Adam Smith. Adam  Smith  stated,  “Economics  is  concerned  with  an  enquiry  into  the  nature  and  causes  of  wealth  of nations, and it is related to the laws of production, exchange, distribution and consumption of wealth.” The central point of his definition is ‘wealth.
This definition  further explored that the wealth of a nation included only material goods, non-material  goods  were  not  included.
Adam Smith in his  definition  gave too  much  importance  to  the  creation  of  wealth  in  an economy.  Many economists believed that   economic success of any nation depended only on the accumulation of wealth.

Wealth definition of Adam Smith was criticized on the following grounds:

Materialistic Concept: This definition laid too much emphasis on wealth and did not consider human welfare.
Stressed on the concept of Economic Man: This definition is based on the concept of Economic man that emphasised the main motive of a man is to acquire wealth. However, other motivations of a man like feeling affection, emotions etc. are neglected.
Ambiguous: the definition of wealth is not very clear.  In  earlier  days,  wealth  included  only  material goods  such  as  money,  gold,  silver,  land,  sugar,  tea  and  ghee  which  are  visible.  Non-material goods were not included.  Hence,  non-material  goods  such  as  services  of  teachers,  doctors  and  engineers are not considered „wealth‟ under this definition.

Answered by Christina | 24th Apr, 2019, 09:40: AM

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