Welfare Definition — Alfred Marshall

Alfred Marshall, in his 1890 book Principles of Economics, shifted the focus of the subject away from wealth alone and toward human welfare:

"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."

Here wealth is no longer an end in itself — it becomes a means to human welfare. Marshall's central idea is that Economics should study man, not wealth for its own sake, and specifically the material side of man's everyday economic activity — earning a living, buying and selling, saving and spending.

Main features of Marshall's definition:

• It is a study of mankind, restoring the human element the wealth definition seemed to neglect.
• It is concerned only with the material requisites of well-being — food, clothing, shelter and similar goods — and the activities connected with getting and using them.
• It studies both the individual and the social (collective) side of economic activity.
• It treats Economics as a dynamic, evolving subject tied to "the ordinary business of life," not an abstract, timeless science.

Criticisms of the welfare definition (chiefly by Lionel Robbins):

• Too restrictive on "material" — it excludes valuable non-material services such as those of a teacher, doctor, dancer or lawyer, even though such services clearly have economic value and are bought and sold like any other good.
• Merely classificatory, not analytical — Robbins argued Marshall's definition only sorts human activities into "material" and "non-material" boxes, rather than explaining the underlying economic behaviour common to all of them. …