Backhouse, Roger, and Steven G. Medema. 2009a

American Economic Association
Retrospectives: On the Definition of Economics

Author(s): Roger E. Backhouse and Steven G. Medema
Source: The Journal of Economic Perspectives, Vol. 23, No. 1 (Winter, 2009), pp. 221-234
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/27648302
Accessed: 19-02-2016 17:57 UTC
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://www.jstor.org/page/
info/about/policies/terms.jsp
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content
in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship.
For more information about JSTOR, please contact support@jstor.org.
American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to The Journal of
Economic Perspectives.
http://www.jstor.org
This content downloaded from 201.221.123.37 on Fri, 19 Feb 2016 17:57:31 UTC
All use subject to JSTOR Terms and Conditions
23, Number 1?Winter 2009?Pages
Journal ofEconomie Perspectives?Volume
Retrospectives
the Definition
On
of Economics
and Steven G. Medema
E. Backhouse
Roger
221-233
the history of economic terms and ideas. The hope is to

the
workaday dialogue of economists, while perhaps also casting new light
deepen
on ongoing questions. If you have suggestions for future topics or authors, please
contact Joseph Persky, Professor of Economics, University of Illinois, Chicago, at
This feature addresses
(jpersky@uic.edu).
Introduction
Economists
are far from unanimous
are some d?finitions
of economics
about the definition of their subject. Here

principles of economics
from contemporary
textbooks:
is the study of economies, at both the level of individuals and

(Krugman and Wells, 2004, p. 2).
Economics
of society as a whole
is the study of how human beings coordinate
Economics
desires,
given
the decision-making
social
mechanisms,
realities of the society (Colander,
customs,
their wants and

and
political
2006a, p. 4).
History and Philosophy ofEconomics, University of

Roger E. Backhouse isProfessor of the
United
Kingdom. Steven G. Medema, isProfessor of
Birmingham, Edgbaston, Birmingham,
Economics,
University
(r. e. backhouse@bham.
of
Colorado
ac. uk)
and
Denver,
Denver,
Colorado.
(steven. medema@ucdenver.
Their
e-mail
addresses
edu).
are
Journal ofEconomie Perspectives
222
is
Economies
the
of
study
how
scarce
its
manages
society
resources
(Mankiw, 2001, p. 4).

is the] social science that studies the choices
[Economics
businesses,
and
governments,
societies
entire
as
make
they
that individuals,
with
cope
scarcity
(Bade and Parkin, 2002, p. 5).

is the study of human behavior, with a particular focus
[E]conomics
on human decision making
(Gwartney, Stroup, Sobel, and MacPherson
2006, p. 5).
economics
Thus,
nation
the
is apparently
the
process,
study
of
the
of
study
effects
of
the
the
economy,
scarcity,
the
of
study
science
of
coordi
the
and
choice,
the
study of human behavior.
to draw from this lack of agreement

is that the
possible conclusion
definition of economics does not really matter. After all, the textbooks including
these d?finitions are all fairlymainstream and quite similar inmany ways. Perhaps
One
is best viewed as a tool for the first day of principles
the definition of economics

of
otherwise
but
classes
concern
little
to
practicing
economists.
Another
possible
is that the subject of economics is too broad to be usefully pinned down

in a short definition. Richard Lipsey, for example, refused to define the subject in
his widely used textbook, An Introduction toPositive Economics (1963), but instead
conclusion
gave
of
series
reflected
this
spirit
economic
problems,
in his
statement:
oft-quoted
suggesting
thereby
a broader
in any singular definition. Jacob Viner
be encompassed
than could
discipline
of
examples
"Economics
is what
economists
do."
(We have been unable to find this statement inViner's publications, but a remark
(1941, p. 1), a student of Viner's in 1932-3, suggests that it
by Kenneth Boulding
arose
in conversation.)
is potentially very broad; indeed,

sympathize with Viner's quip. Economics
ithas become increasingly broad over the past 200 years. Attempts to pin down the
subject in a few words are thus almost certainly doomed to failure. Viner suggests
We
that
more
are
actions
to convey
as
what
the methods
doing
of
definition
see
analysis,
As
of economics
definitions.
are important. Definitions
economists
economics.
than
important
definitions of economics
as
legitimate
and
approach,
economic
the
classical
has
also
growth.
economists,
The
techniques
also
for economic
analysis,
consider
they
that
believe
have often helped

as well
appropriate
for
these have evolved over time, it is not surprising that the

changed.
Early Definitions: National Wealth

For
problems
we
However,
of economics
Greek
and Human
political
writer
Xenophon
economy
had
was
Behavior
about
invented
national
the
term
wealth
"economics"
and
Roger E. Backhouse and Steven G. Medema
223
in the fourth century BCE, using it to refer to the art of household management,
of the word "economy" that is still active today. Adding
the word
a sense that this problem could be extended to the level of
reflected
"political"
a meaning
twomillennia
nations. Some
of
branch
the
later,Adam
or
of a statesman
science
Smith described
and
legislator,"
his
economy as "a
political
into theNature
Inquiry
and
Causes of theWealth ofNations (1776 [1976], p. 428) explained the relative fortunes
of different countries, as well as the policies thatmight "enrich both the people and
the
sovereign."
In
the
nineteenth
early
this wealth-based
century,
was
definition
in
sharpened
several ways. As Britain's industrial revolution unfolded and the outlines of indus
trial capitalism began to emerge, economics began to reach beyond the issue of
the more
with
wealth,
increasing
broad-based
emphasis
being
narrower
of wealth."
consumption
in the early decades
omy that emerged

cally
and
distribution,
production,
in scope
found
than
The
analysis
Jean
that treats "the
of
study
econ
political
century was philosophi
of the nineteenth
in the
in
captured
as the "science"
Baptiste Say's (1803) definition of political economy
of Smith,
who
after
all was
once
a professor of "moral philosophy" (Fontaine, 1996; Winch, 1996; Rothschild, 2001).

Where Adam Smith's work was only one facet of a larger system of moral philoso
phy and so cannot be understood apart from his concern with morality and with
society as a whole,
as
a new
creating
of Say and David Ricardo
the generation
and
science
separate
of
saw themselves
(1817)
economy.
political
to be defined
by its subject matter

Although political
the
classical
definitions
the
period (O'Brien, 2004),
given began to hint
throughout
at a methodological
For
Stuart
Mill
(1844 [1967], p. 323)
example, John
approach.
defined political economy in thisway: "The science which traces the laws of such of
continued
economy
the
of
phenomena
society
as
arise
from
the
combined
for
of mankind
operations
are not modified by the

the production of wealth, in so far as those phenomena
Mill
defined
the
of
other
any
subject as dealing with the
pursuit
object." Here,
to
the methods
that were appropriate
results of certain motives, thereby linking it
other motivations
for it, and categorizing

of
definitions
these
motives
of wealth
the accumulation
view,
were
tied
to a
depended
as outside of
political
specific
on
subject
certain
economy. But his

In Mill's
matter?wealth.
laws
that were
to be
known
true, like the law of diminishing returns and the "population principle"?that
population would multiply faster than food supply. Even though these laws were
known
to be
true,
they
were
to be
regarded
as
only
statements
of
tendencies,
for
(1844 [1967], p. 330) called "disturbing causes" might interferewith their

operation. The Millian method of political economy centered on logical deduction
what Mill
from
these
known
premises,
historical
although
investigation
was
needed
to estab
lish the applicability of any laws so discovered.

But the discussion of wealth did not always take place at the national level:
some nineteenth-century definitions began to bring in the individualistic element.
For
example,
ifwealth
not wealth,
was made
is the fundamental
up
of
value,
exchangeable
phenomenon.
This
then
perhaps
insight implied
exchange,
that political
224
economy was concerned with the interaction of individuals within a larger social
context. Richard Whately
(1832) went so far as to propose renaming the subject
science
"catallactics"?the
of
Wealth-based
exchanges.
of
definitions
the
subject
to dominate, but the idea of catallactics did not disappear:

continued
in the
modern era, Ludwig von Mises (1949, p. 3), F. A. Hayek (1976, pp. 108-109), and
(1964, p. 217) have argued the case for a definition grounded in
James Buchanan
catallactics.
The
the
more
focusing
of
activities
practical
on
Carl Menger
accumulation.
for
the motivation
human
that
view
economic
as a
(1871
the
change
of how
and
pleasure
This
pain."
on
focus
towards
the
the
to understand
economic
a welfare
of
In
utility?both
This
criterion.
perspective
as "a calculus of
of economics
as
whether
utility,
Stanley
influenced by
phenomena.
in terms
as a welfare
to
references
focus was
by explanation
and
part
is "related to
as William
such
of definitional
marked
later
of wealth
concept
eschewed
Menger
economists,
[1965], p. vi) depiction
(1871
on
than
While
some
are made
choices
is reflected injevons's
men."
needed
was
fore
saw the rise of definitions of
economy
this change
was
to the
[1976], p. 48) said that economics

for
economizing,
psychology
theory,
description
more
behavior
economizing
Jevons and Alfred Marshall,

their
even
century, when political
of the nineteenth
economics
came
element
individualistic
or
judgment
frame
work for thinking about choices, suggested a move toward individualism and away
from the emphasis on wealth that had dominated classical thinking. Indeed, even
those, such as Henry Sidgwick (1901), who held to the older wealth-based defini
tion of the subject, often used utility-related concepts of well-being rather than
material
in
wealth
sense.
its traditional
are
to the definition
the background
changes
famous by Alfred Marshall. In what became
These
his Principles ofEconomics, Marshall
of economics
made
the dominant
[1920],
(1890
treatment of the subject,

1.1.1-2) wrote:
is a study of mankind
in the ordinary
Economy or Economics
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
Political
the
. . .Thus
of wellbeing.
requisites
and
other,
more
important
it is on
the one
of
side,
part
side
the
study
study
of wealth;
and
on
of man.
This definition was a significant shift, forMarshall was claiming that economics was
a "study of man." Not only did Marshall study individuals' actions, but he
primarily
also
attached
environments
faced
people
absent from modern

even
to
importance
more
clearly
the way
and
the
economics
at
the
human
choices
character
evolved
they made,
(Raffaelli, 2006). The
center
of
the
approach
of
to
in response
considerations
the
generally
individualistic element was

the Austrians
and
others
influenced by them, such as Knut Wicksell

(1901 [1934]) and Philip Wicksteed
was
about economizing?tbe
elimination of
(1910), who believed that economics
waste
in
the
administration
of
resources.
Retrospectives: On theDefinition ofEconomics
Marshall's
marks
also
definition
time
when
the word
as the favored name
economy"
225
was
"economics"
dis
for the subject. Knut Wickseil

are taken by individuals (there
placing "political
(1901 [1934], pp. 1-2) argued that, as decisions
no such thing as the national household),
the term "political economy" was
being
not use the new term "econom
not appropriate?although
did
Wicksell apparently
ics," either. Wicksteed
practice
tion
Alfred
the main
Marshall,
were
of an
whether
of resources,
17), too, felt that "political" no
(1910, p.
who
of economists,
"the
examining
of
supporter
general
principles
a household,
individual,
the
term
a business,
or a State."
this
"economics,"
longer fit the
of administra
For
of
renaming
the
a
subject was part of establishing economics as professional, scientific field, which
meant distancing it from direct political involvement and an ideological commit
ment
to laissez-faire
that had
become
associated
of some
in the minds
with
the
term
economy."
"political
The Robbins Definition: Scarcity

common
the most
Perhaps
currently
definition
accepted
of
stems
economics
Essay on theNature and Significance ofEconomic Science (1932

[1935]), where Robbins
(p. 15 [p. 16]) defined economics as "the science which
from Lionel Robbins's

studies
as
behavior
human
was
claimed
ends
very much
minority
scarce
and
means
that his definition did no more
thought about and practiced
up the way economists

definition
between
relationship
have alternative uses." Robbins
at
view
the
which
than sum
their discipline, but actually his

time.
Of
the
various
textbooks
offering definitions of the subject in the first three decades of the century, only
latter of whom identi
Fetter (1915) and Fairchild, Furniss, and Buck (1926)?the
fied "the insatiability of man and the niggardliness of nature"
(p. 8) as the
foundation
close to the definition offered by Robbins.

definition of economics was criticized both for being too broad
too narrow. It was considered too broad in that it failed to divide
of economics?came
The Robbins
and for being
economics
from
sufficiently
other
social
sciences.
But
it was
also
said
to be
overly
narrow in that itwas too heavily tilted toward theory and left little, ifany, room for
and
history,
analysis,
empirical
institutions?and
it
wrote
essentially
ethics
out
of
economics.
The
to accept
textbooks of the 1920s and 1930s confirm that economists were reluctant
the Robbins
England, Marshall's
States,
one
could
find
definition
definition
leading
and Medema,
In
(Backhouse
forthcoming).
remained as dominant as his text. In the United
texts
arguing
that
economics
was
about
"the wealth
activities ofMan"
getting and wealth-using

and that no definition was
(Ely,Adams, Lorenz, and Young, 1926)

(Taussig, 1927). This time period was the
required
a broad movement
emphasizing empirical work and
heyday of Institutionalism,
about
A typical institutionalist
theories
individuals.
of
abstract
maximizing
skeptical
a
is found in
textbook by the Harvard
labor economist
definition of economics
226
Sumner
process
(1931, p. 11): "The subject matter of economics
Slichter
by
men
which
get
as
but
process,
logical
. . . economics
living
of
complex
studies
human
industry,
and
practices
is industry, the
not
as
techno
This
relationships."
definition, clearly influenced by Thorstein Veblen, covered Slichter's own work on

labor, as well as John R. Commons's
analysis of legal history;Wesley Clair Mitchell's
on
work
quantitative
of Economic
Bureau
income
wealth,
Research;
and
distribution,
and
Gardner
Means's
the
analysis
cycle
of
at
the National
the
corporation
pricing. Slichter's definition has some echoes of

but the emphasis on the social organization of industry implies
and what he called administered

Alfred Marshall's,
a
different
somewhat
perspective.
If the Institutionalistswere an example of those who saw theRobbins definition as

too narrow, other textbooks saw it as too broad. Frank Knight's (1933) The Economic
Organization, which along with Marshall's Principleswas the foundation of Chicago price
theory from the 1920s, said (p. 4) that economics "deals with the social organization of
economic
the
via
activity"
or under
system
price
free
considered
Knight
enterprise.
the
definitions given byMarshall and Robbins too broad, and even "useless and mislead
a fairly narrow scope in the
ing," arguing that economizing behavior has
larger
action.
of
human
Indeed, Knight thought in the 1920s (!) that economists
spectrum
tended to apply the concept of rationality to far too broad a range of activities.
Robbins's
ior
Yet,
that had
while
the
accompanied
of
development
made
definitions
scarcity
their
marginalist
occasional
individual behav
microeconomic
analysis.
in new
appearance
textbooks
Essay, definitions emphasizing wealth and exchange

and books employing these older definitions did not move
after Robbins's
published
remained
dominant,
the
toward
(1932) definition reflected the focus on analyzing
scarcity
definition
when
they
were
revised.
literature in economics
in the post-World War II

professional journal
all drawing on themes
years offered at least four definitions of economics,
"economics
iswhat economics does"; 2) a
earlier: 1) the Vineresque
mentioned
The
Robbins-style definition based on scarcity; 3) a definition in terms of wealth

(which was seen as consistent with a belief in the centrality of scarcity) ; and 4) a
definition of economics as concerned with the subject of rationality (Parsons, 1937,
pp. 757-75; Spengler, 1948, pp. 2-3). By 1960, one could still find references
critical of the Robbins
by
who
economists
definition
questioned
in the journal
the
direction
literature, but most of these were
in which
economics
was
moving.
themainstream, Harry Johnson (1960, p. 552) allowed thatmost economists

"would probably accept" the Robbins definition, "at least as a description of their
Within
activities."
workaday
The gradual movement
World
During
War
II reflects
the war,
many
an
toward broader acceptance of theRobbins definition after
economics
economists
that was
had
becoming
worked
narrower
alongside
and more
scientists
and
technical.
engineers,
solving urgent practical problems (including logistics and military tactics and strategy).
The Cold War continued thisprocess, with much work on game theory and operations
research being sponsored by the U.S. Navy and the Air Force, the latter often being
227
linked to RAND. In the early 1950s, the only unambiguous

endorsements of the
Robbins definition in the journal literature were by members of the Cowles Commis
sion, the center of work on general equilibrium modeling. But by the end of the 1960s,
when
mathematical
the axiomatic
methods?including
more
much
approach?were
pervasive, this definition had become widely accepted.

By the late 1960s and into the 1970s, the textbook literature had shifted toward
deals
with
of
questions
equally with scarcity definitions

That
of wealth.
distribution
individual behavior
given
emphasis
of
his
with
on
of
the
the national
on
focused
the
resonated
the production
social
level
rather
economy.
are
the
social
level:
be
scarce
administering
the war-time
two decades
latter,
still defined
can
economics
or
of using
problem
at
choice
scarce,
as a
are
that wants
as
resources
Camp
economics
"Recalling
defined
on
and the firm
and
Depression
Some
and
than
is not surprising,
edition from 1948)
the Great
Economics,
statement that
"For Whom?"
emphasizing
was
focus
memories
resources
and
concerned
edition
and
(1960, p. 23) text, like Samuelson's,
very much
subject
first
"How?"
(individual
the end of this 600-page
administering
bell McConnell's
unlimited
"What?"
and definitions
Samuelson's
all-too-fresh
still
on
the
choice at the level of the consumer
gets 90 pages near

the
In
(1948) did not offer a definition of the subject. His
Paul Samuelson
economics
too.
definitions,
scarcity-based
Robbins-style
science
the social
( the means
of produc
ing) so as to attain thegreatest ormaximum fulfillment of our unlimited wants (thegoal of

tenth
Samuelson's
By
producing).'"
in
edition
1976,
was
he
however,
an
offering
expansive definition of the subject based upon his original three questions, and
dealing explicitly with both individual and social choices (Samuelson and Temin,
is the study of how people
1976, p. 3): "Economics

the use
or without
with
have
alternative
consumption,
It
the
analyzes
to
uses,
or
now
costs
and
the
future,
in different
interpreted
through
process
Even
economics.
than
overt.
There
stage,
and
either
choice
can
that
be
need
For
may
persons
often
that
Positive
for
society.
allocation."
the
But
the Robbins
creates
scarcity
on
makes
are
the
in
put
result
of
not
scarcity
and
necessary
individual
contemporary
rather
rationality
allocation
choice
of
in turn takes place
links were
definition
resource
the process
prices
bounded
these
between
relationship
currency
advocate
altogether.
that
turn,
focus
in
seem straightforward, but it has
is common
maximization,
rationality
fact
could
them
groups
resource
of
that
distribute
and
consider
example,
rationality
in
need
rational.
and
patterns
improving
of economics
question
the
economics
be
no
scarcity,
However,
that
of
of
idea
various
among
resources
productive
commodities
between Scarcity and Choice
ways.
rational
critics
the
rejecting
problem.
of
and society end up choosing,
idea that scarcity implies choice, which
scarcity and choice. The

a
employ
of
benefits
definition
The Robbins
scarce
various
produce
in
The Evolving Relationship
been
to
of money,
choice,
scarcity,
so
always
at
center
distribution
does
nor
and
not
that
from
imply
such
this
228
comes
the
of markets
analysis
are
development
about
can
macroeconomics
and
other
the
overcoming
be
seen
as
about
allocation
problem
avoiding
all of this analysis at both themicro and macro

or without
with
rational-choice
mechanisms.
of
scarcity,
the waste
of
and
Growth
even
and
scarce
levels can be?and
Keynesian
resources.
But
has been?done
underpinnings.
thus left space for economists to see the

Milton
Friedman
in
different
ways.
subject
adopted a scarcity-based definition of
in his famous Chicago price theory lectures as early as the mid-1940s,
economics
scarcity definition of economics
The
"An
where
problems,"
science
"the
economics
calling
of
economic
how
particular
exists
problem
solves
society
its economic
scarce means
whenever
are
to
used
see also Johnson, 1947 [2008]). This

satisfy alternative ends' (Friedman, 1962, p. 6;
definition contains no mention of rationality or of maximizing behavior; indeed,
Friedman did not find it necessary to ground his analysis of demand in any theory
behavior (Mirowski and Hands,
1998). Friedman's
(1953) methodolog
ical view was that economics is simply about observed behavior, irrespective of what
of human
causes
that
In
behavior.
this
argument,
utility
is no
maximization
more
than
hypothesis for predicting behavior.

The move toward a greater emphasis on the choice process began in the 1940s,
though it really did not pick up steam until the 1950s and 1960s. George Stigler
(1942, p. 12, emphasis added) took matters a step further than Friedman when he
to scarcity, defining economics as "the study of the principles
wedded maximization
the
governing
of
allocation
objective of the allocation

as
economics
study
scarce
resources
among
ends
competing
the
when
is to maximize the attainment of the ends." The notion of
of maximization
under
constraints
was
also
at
the
center
of
(1947) Foundations ofEconomic Analysis, though Samuelson did

not provide a definition of the subject there.
In contrast, Kenneth Arrow (1951, 1959), and others who favored an axiomatic
to economic
theory, focused on rational action, which they explicitly
approach
Paul
Samuelson's
from utilitymaximization
subject to a budget constraint and the various
limitations that itposed as a theory of choice. Rationality is a more encompassing
distanced
than maximization?for
notion
facing
does
principals
the
concept
and
agents.
of
rational
example,
Game
theory
expectations.
it also
extends
makes
strong
Rational
to the
demands
preferences
analysis
on
in
of situations
as
rationality,
this view
were
to be self-interested?though
they could be?but
simply complete
see
also
and transitive (Giocoli, 2003;
Arrow's comments inAmadae, 2003, p. 230).
The larger point to be taken here, though, is that this approach
reflected an
not assumed
on choice and the psychology of choice as the centerpiece of economic

of the term "rational choice" was also especially significant in the 1950s
Use
analysis.
and 1960s for itsnormative implications in a world where capitalist democracy had
emphasis
to be defended
against Soviet collectivism: it showed that, like planning, efficient

too could be grounded
in rationality (Amadae, 2003). This focus on
to
served
demarcate
economics
from sociology (see Samuelson
also
rationality
markets
1947, p. 90, echoing
the view of the Harvard
sociologist Talcott Parsons).
229
behavior and rationality were sometimes being

By the 1970s, maximizing
Becker
combined.
As
it, "The
(1976, p. 5) famously described
Gary
explicitly
combined assumptions of maximizing behavior, market equilibrium, and stable
as
approach
relentlessly and unflinchingly, form the heart of the economic
used
preferences,
I see
it." This
definition
of economics,
of course,
is a far more
narrowly
and specifically drawn definition than one seen in Robbins, while at the same time
being completely consistent with Robbins. Itmakes economics an approach rather
than a subject matter, and it is extremely specific about the nature of the individual
choice process and the type of social interaction that economic
also
an
facilitated
of
expansion
the
The Expanding Boundaries
as
behavior
scope
economic
analysis involves. It
analysis.
of Economics
as "the science which
(1932, p. 15) defined economics
Robbins
When
human
of
between
relationship
ends
scarce
and
means
studies
which
have
alternative uses," he noted immediately the rather radical implications for the
scope of the science, insisting that as long as there are opportunity costs imposed
there
by scarcity,
are
in some
Becker,
"no
on
limitations
did not pursue
16). But Robbins
at
remarks
unpublished
the
of Economic
subject-matter
Science"
the implications of this statement. This

the
session
the
marking
75th
(p.
led Gary
anniversary
of the publication of Robbins's Essay at the ASSA

(Allied Social Science Associa
to
in
2007,
tions) meetings
suggest that Robbins perhaps
Chicago, during January
did not really believe his own definition. Of course, by thismeasure, neither did
anyone else, in that prior to the 1960s almost no economists would have applied
economic techniques across the full spectrum of human life and decision making.
scarcity
of economics was bound up in the shift from
of the boundaries
The expansion
to choice?when
economists
to think
began
as
of economics
the
analysis
of
individual or collective decision making. Some of the early moves toward expand
ing the boundaries of economics?for
example, Becker's (1957) work on discrim
(1958, 1962) work on human
ination and Jacob Mincer's
not
far
different
from
from
approach
as outcomes
concerns.
traditional
economists'
previous
work
by
capital acquisition?were
this
However,
treating
phenomena
took
literature
as
components
or
of an individual choice process. Similarly, the distinctive feature of the

and Gordon Tullock
work on political processes by James Buchanan
(1962),
Anthony Downs (1957), William Riker (1962), and others was the use of a choice
theoretic framework. It was not until well into the 1960s that economists moved
decidedly outside the subject's traditional boundaries, with work such as Becker's
(1968) analysis of crime and punishment. Against a legal tradition that saw crimi
nals
as
Becker
consistent
While
unreasonable
that
assumed
and
stable
the boundaries
violators
of
criminals
were
preferences,
were
reasonable
society's
in
expanding,
making
light
of
however,
rational
their
norms
and
career
choices
opportunity
the
approach
sets
to
conventions,
or
based
constraints.
"doing
econom
on
230
ics,"
was
ironically,
to
proaches
the
to economics
to the side questions
broader
institutions,
move
The
narrowing.
the effect of pushing
of
conceptions
as
the
of philosophy
and
rationality,
of choice
analysis
had
and ethics, history and
various
nonmathematical
ap
subject.
Given Gary Becker's role in pushing outward the boundaries of economics,

one might expect that he would have had strong views about a broad definition of
the subject. However,
in his 1971 graduate textbook, Becker (p. 1) defined eco
nomics with a straightforward extension of the Robbins definition to a choice
theoretic
framework:
"the
of
study
the
allocation
scarce
of
means
to
com
satisfy
peting ends." In 1976, though, Becker (1976, p. 4) felt compelled to point out that
most economists find the generality of this definition
embarrassing and qualify it
"to
most
exclude
nonmarket
behavior."
What
tilling these soils (many of them Becker's

behavior
nonmarket
from
their
own
Becker
distinguished
and
others
is that they did not exclude
students)
work.
some variant of the Robbins definition

might seem to go hand-in-glove with
not
the
field
of
economics,
everyone associated with the expansion of the
broadening
of
boundaries
economics has been favorably disposed toward the Robbins definition.
While
For example, both James Buchanan

extension
general
of
to a
and Ronald Coase have expressed opposition
to all
economics
areas
in which
are made.
choices
Buchanan
was a student of and greatly influenced

to
(1964)?who
by Frank Knight?preferred
define economics as "the study of thewhole systemof exchange relationships" (p. 220),
even suggesting that theRobbins definition "served to retard ... scientific
progress" (p.
214). Coase
(1977, p. 487) suggested that economics
social institutions that bind together the economic
cluded
involves the study of "the

system," in which he in
and the banking

firms, input and output markets,
system, and he
a
dim future for the application
of rational choice theory across the
predicted
social
sciences
(Medema,
For
1994).
both
Buchanan
and
Coase,
econom
then,
by its subject matter rather than its approach.

of this expansion of the scope of economics has been
ics is defined
Much
based
on a
that individuals choose
rationally in all aspects of their lives: not

and consumption choices (legal or illegal), but also in
unifying concept
just inmaking occupational
the voting booth, in marriage,
economics
economics
in a different direction:
of
choice,
rational
tent.
For
example,
and
and
behavioral
it has
a
experimental
often
broad
in the rearing of children. Recent

the
pushes
instead of basing explanations
questioned
range
economics
of work
whether
shows
choices
that
are
people's
work
on a
in
of
boundaries
hypothesis
rational
or
choices
consis
over
an
on how those choices are framed.

objective set of outcomes will vary depending
This work often verges into what has been traditionally viewed as psychology (how
people actually make choices) or sociology (how choices are influenced by social
settings). This kind of work has not yet resulted in the sort of reformulation of the
foundations
of economic
tion of economics,
analysis that could lead to displacing

but itmay have the potential to do so.
the Robbins
defini
231
Conclusion
Modern
subject.
economists
a
At
time
when
econometrics,
analysis,
are
economists
laboratory
and
experiments,
definition
as
subjects
tackling
religion with a methodological
crime, and
auctions,
to a homogeneous
do not subscribe
as
diverse
of their
growth,
toolkit that includes

case
historical
real
and
studies,
they are debating the explanatory roles of rationality and behavioral norms,
is likely to be inadequate.
concise
definition of economics
any
This lack of agreement on a definition does not necessarily pose a problem for
when
are generally guided

by pragmatic
the subject. Economists

or
works
views
by methodological
to repeat
definitions:
do.
economists
emanating
the comment
the way
However,
from
the definition
Becker's
doing.
and the principles

authors'
perspectives
definition
reflects
of economics
clearly
texts from which we quoted

on
current
work
in the
these texts varies little across authors

However,
to
see
the
modern
can
also
reflect
move
and
can
even
works"
claimed
on
This
is what
is more
evolved
to justify what economists

to economic
approach
in our
introduction
analysis,
reflect their
contents
if the actual
of
2006b).
the direction
influence
is a statement
formal
by
in which
their
Robbins
practice.
with
which
want
authors
(1935,
that his essay was based on "the actual practice
economics.
of what
economics
has
subject?even
(Colander,
definitions
subject
italics added)
his
not
sources,
attributed to Jacob Viner,
than a historical curiosity. At times, definitions are used

are
considerations
various
p.
xv,
of the best
the Marshallians
and
the Institutionalists, the dominant forces in the profession at the time, would not
have agreed. In other words, Robbins's definition reflected the way he believed
economics shouldbe done. James Buchanan
(1964, p. 214), for one, believed that
the Robbins definition did influence the practice of economics rather than simply
summing itup: "Only since The Nature and Significance ofEconomic Science," he said,
"have economists so exclusively devoted their energies to the problems raised by
scarcity, broadly
decisions."
Whether
considered,
or
not
and
economists
specific definition may constrain

legitimate to tackle and the methods
to the necessity for the making

are
conscious
of
it
happening,
of allocative
adhering
the problems that economists believe

by which they choose to tackle them.
to
it is
232
References
Amadae,
2003.
Rationalizing
Capitalist
Press.
University of Chicago
Sonja.
Democracy. Chicago:
Arrow, Kenneth J. 1951. Social Choice and Indi
vidual Values. New York: Wiley.
Arrow,
Functions
Kenneth
26(102):
121-27.
and
Backhouse,
1959.
J.
Orderings."
Choice
"Rational
n.s.
Econ?mica,
E., and Steven G. Medema.

Robbins's
"Defining Economics:
Roger
Forthcoming.
Essay in Theory and Practice." Econ?mica.
Parkin. 2002. Foun
Bade, Robin, and Michael
dations ofMicroeconomics. Boston: Addison Wes
ley.
Becker, Gary S. 1957. The Economics ofDiscrim

Press.
ination. Chicago: University of Chicago
Becker, Gary S. 1968. "Crime and Punish
ment: An Economic
cal Economy, 76(2):
Approach."
169-217.
ofPoliti
Journal
Becker, Gary S. 1971. Economic Theory. New

York: Knopf.
Becker, Gary S. 1976. "The Economic
Ap
to Human
In The Economic
Behavior."
proach
toHuman Behavior, 3-14. Chicago: Uni

Approach
Press,
versity of Chicago
Boulding, Kenneth E. 1941. Economic Analysis.
New York: Harper.

1964.
"What Should
Buchanan,
James M.
Do?"
Southern Economic Journal,
Economists
213-22.
30(3):
Tullock.
Buchanan,
James M., and Gordon
1962. The Calculus ofConsent. Ann Arbor: Univer
sity of Michigan
Coase, Ronald
Press.
H.
and Con
1977. "Economics
and
In The
Organization
tiguous Disciplines."
Retrieval ofEconomic Knowledge, ed. M. Perlman,
481-91 Boulder, CO: Westview Press.
David C. 2006a.
Colander,
Irwin.
Boston: McGraw-Hill
Economics.
6th ed.
David C. 2006b. The Stories Econo

Colander,
mists Tell: Essays on theArt of Teaching Economics.
New York: McGraw-Hill.
1957. An Economic Theory of
Downs, Anthony.
Democracy. New York: HarperCollins.
S. Adams, Max O.
T., Thomas
Ely, Richard
and Allyn A. Young.
1926. Outlines of
Lorenz,
Economics.
4th ed. New York: Macmillan.
Stevenson
Fred Rogers,
Fairchild,
Edgar
Furniss, and Norman Sydney Buck. 1926. Elemen
Economics. New York: Macmillan.
tary.
Fetter, Frank A. 1915. Economic Principles. New

York: The Century Co.
1996. "The French Econ
Fontaine, Philippe.
omists and Politics,
1750-1850:
The
Science
and
Art of Political
Canadian
Economy."
Journal
of
279-93.
29(2):
1953. "The Methodology
of
Friedman, Milton.
In Essays inPositive Econom
Positive Economics."
Economics,
ics, ed. M.
Friedman.
Chicago:
sity Press.
Friedman, Milton.
sional Text. Chicago:
Nicola.
Giocoli,
Agents. Aldershot:
Univer
Chicago
1962. Price Theory: A Provi
Aldine.
2003.
Edward
Modeling
Rational
Elgar.
Gwartney, James D., Richard L. Stroup, Rus
sell S. Sobel, and David A. MacPherson.
2006.
Microeconomics: Private and Public Choice. 11th edi
tion. Mason, OH: Thomson.
Hayek, Friedrich A. 1976. Law, Legislation and
Liberty. Vol. 2: The Mirage
of Social Justice. Chi
Press.
cago: University of Chicago
Jevons, William
Stanley. 1871 [1965]. The The
ory ofPolitical Economy. 5th ed. London: Macmil
lan.
1947
Johnson, Glenn.
ton Friedman's
Course
Economics
Economic
Marianne
63-117.
[2008] "Notes from Mil

in Economic
Theory,
In Research in theHistory of
300A."
Thought and Methodology, vol. 26-C, ed.

Johnson and Warren J. Samuels, pp.
Johnson, Harry. G. 1960. "The Political Econ

Canadian Journal ofEconomics
omy of Opulence."
and Political Science, 26(4):
552-64.
Knight, Frank H. 1933. The Economic Organiza
tion. Chicago: University of Chicago.
2004. Micro
Krugman, Paul, and Robin Wells.
economics. New York: Worth.

Lipsey, Richard
Positive Economics.
G.
1963. An
London:
Introduction
Weidenfeld
to
and
Nicolson.
2001. Principles of Eco
Mankiw, N. Gregory.
nomics. 2nd ed. Forth Worth: Harcourt
Publish
ers.
Alfred.
1890 [1920]. Principles of
Marshall,
Political Economy. 8th ed. London: Macmillan.
McConnell,
Campbell R. 1960. Elementary Eco
nomics: Principles, Problems and Policies. New York:
McGraw-Hill.
Steven
Medema,
London: Macmillan.
Carl.
Menger,
nomics. Translated
Hoselitz.
G.
1994. Ronald
H.
Coase.
[1976]. Principles of Eco

by James Dingwall and Bert F.
New York: New York University Press.
1871
Mill, John Stuart. 1844 [1967]. "On the Defi

nition of Political Economy
and on the Method
of Investigation Proper to It." In Essays on Some
Unsettled Questions
ofPolitical Economy, reprinted
The
in Essays on Economics and Society, 1824-1845.
Collected Works ofJohn StuartMill, Vol. 4. Toronto:
Press.
University of Toronto
in Human
1958. "Investment
Mincer, Jacob.
Income Distribution." Jour
Capital and Personal
281-302.
nal ofPolitical Economy, 66(4):
1962. On-the-Job
Mincer,
Training:
Jacob.
Costs, Returns and Some Implications. Journal of

Political Economy, 70(5, Part 2): 50-79.
1998.
Mirowski, Philip, and D. Wade Hands.
"A Paradox
of Budgets: The
Neoclassical
tion of American
Postwar
Stabiliza
Demand
Theory."
In The Transformation ofAmerican Economics: From
to Postwar Neoclassicism,
ed.
Intenvar Pluralism
and Malcolm Rutherford,
260-92.
Mary Morgan
NC: Duke University Press.
von. 1949. Human Action. New
Ludwig
Haven, CT: Yale University Press.
D. P. 2004. The Classical Economists
O'Brien,
Durham,
Mises,
Princeton University Press.

1937. The Structure of Social
Parsons, Talcott.
Action. New York: McGraw-Hill.
Revisited. Princeton:
2006. "Character and Capa

Raffaelli, Tiziano.
to Alfred Mar
bilities." In The Elgar Companion
and M.
shall, ed. T. Raffaelli, G. Beccattini,
and Northamp
Dardi, pp. 488-94. Cheltenham
ton, MA: Edward Elgar.
the Principles
David.
1817. On
Ricardo,
of
London:
Political Economy and Taxation.
John
Murray.
1962. The Theory ofPolitical
Riker, William H.
Coalitions. New Haven: Yale University Press.
Lionel C. 1932 [1935]. An Essay on
Robbins,
theNature
London:
and
Significance
Macmillan.
of Economic
Science.
Emma. 2001. Economic Sentiments:

Rothschild,
Adam, Smith, Condorcet and theEnlightenment. Cam
bridge, MA: Harvard University Press.
233
Paul
A.
1947. Foundations
Samuelson,
of
Economic Analysis. Cambridge, MA: Harvard Uni
versity Press.
Samuelson,
McGraw Hill.
Paul A.
1948. Economics. New York:
Paul A., and Peter Temin.

1976.
Samuelson,
Economics. 10th ed. New York: McGraw Hill.
1803 [1834]. A Treatise on
Say, Jean-Baptiste.
Political Economy; or the Production, Distribution,
and Consumption ofWealth, edited by Clement C.
Biddle, translated by C. R. Prinsep.
PA: Grigg and Elliot.
Philadelphia,
1901. The Principles ofPolitical

Sidgwick, Henry.
Economy, 3rd ed. London: Macmillan.
1931. Modern Economic Soci
Slichter, Sumner.
ety.New York: Holt.
1776
Smith, Adam.
[1976]. An Inquiry into the

of theWealth ofNations. Oxford:
Oxford University Press.
of
Problem
Spengler,
Joseph J. 1948. The
Nature and Causes
Order
Journal,
in Economic
Affairs.
Southern Economic
15 (July): 1-29.
Stigler, George J. 1942. The Theory of Competi

tivePrice. New York: Macmillan.
Frank William
1927. Principles
of
3rd, rev. ed. New York: Macmillan.
1832. Introductory Lectures on
Whately, Richard.
Political Economy. 2nd ed. London:
B. Fellowes.
Taussig,
Economics.
Wickseil, Knut. 1901 [1934]. Lectures on Politi

cal Economy, vol. 1, translated by E. Classen. Lon
don: Routledge.
1910. The Common Sense of

Wicksteed,
Philip.
Political Economy. London: Macmillan.
1996. Riches and Poverty: An
Winch, Donald.
Intellectual History ofPolitical Economy in Britain,
1750-1834.
Cambridge
University
Cambridge:
Press.
234

Backhouse, Roger, and Steven G. Medema. 2009a

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Backhouse, Roger, and Steven G. Medema. 2009a

Transféré par

Droits d'auteur :

Formats disponibles

American Economic Association

Retrospectives: On the Definition of Economics

23, Number 1?Winter 2009?Pages

Journal ofEconomie Perspectives?Volume

and Steven G. Medema

the history of economic terms and ideas. The hope is to

are far from unanimous

are some d?finitions

about the definition of their subject. Here

is the study of economies, at both the level of individuals and

is the study of how human beings coordinate

realities of the society (Colander,

their wants and

History and Philosophy ofEconomics, University of

Journal ofEconomie Perspectives

(Mankiw, 2001, p. 4).

(Bade and Parkin, 2002, p. 5).

study of human behavior.

to draw from this lack of agreement

is best viewed as a tool for the first day of principles

the definition of economics

is that the subject of economics is too broad to be usefully pinned down

in any singular definition. Jacob Viner

is potentially very broad; indeed,

are important. Definitions

have often helped

these have evolved over time, it is not surprising that the

Early Definitions: National Wealth

Roger E. Backhouse and Steven G. Medema

in the early decades

omy that emerged

that treats "the

century was philosophi

a professor of "moral philosophy" (Fontaine, 1996; Winch, 1996; Rothschild, 2001).

of Say and David Ricardo

by its subject matter

are not modified by the

for it, and categorizing

economy. But his

(1844 [1967], p. 330) called "disturbing causes" might interferewith their

lish the applicability of any laws so discovered.

Journal ofEconomie Perspectives

to dominate, but the idea of catallactics did not disappear:

[1965], p. vi) depiction

saw the rise of definitions of

[1976], p. 48) said that economics

Jevons and Alfred Marshall,

century, when political

his Principles ofEconomics, Marshall

treatment of the subject,

absent from modern

(Raffaelli, 2006). The

individualistic element was

influenced by them, such as Knut Wicksell

Retrospectives: On theDefinition ofEconomics

as the favored name

for the subject. Knut Wickseil

17), too, felt that "political" no

longer fit the

The Robbins Definition: Scarcity

Essay on theNature and Significance ofEconomic Science (1932

from Lionel Robbins's

that his definition did no more