Q.Explain Marshall's welfare definition of Economics. State its merits and demerits.

Marshall shifted Economics from studying wealth to studying man's material well-being, a major turning point in the subject's history.

Alfred Marshall, in Principles of Economics (1890), defined Economics as: "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." Here wealth becomes a means to human welfare rather than an end in itself.

Merits: (i) It restores the human element, making man rather than wealth the centre of study; (ii) it studies both individual and social sides of economic life; (iii) it treats the subject as connected to real, everyday activity rather than an abstract exercise.

Demerits (mainly Robbins' criticisms): (i) it is restricted to "material" requisites, excluding valuable non-material services such as those of a teacher or doctor; (ii) it is merely classificatory (material vs non-material) rather than analytical; (iii) "welfare" is a subjective, normative idea, not a scientific, measurable one; (iv) it ignores economic activities that do not add to welfare, such as production during a war.

Students often state only the definition without the merits/demerits, or confuse Marshall's criticisms of Smith with Robbins' criticisms of Marshall.