Robbins, Lionel. 1932. An Essay On the Nature and Significance of Economic Science. New York: New York University Press.


Chapter 1: The Subject-Matter of Economics

 

Economics is the study of the causes of material welfare (p. 4), but this common definition fails to adequately describe the sub-fields of economics.

"Wages are the sums earned by the performance of work at stipulated rates under the supervision of an employer" (p. 5). But some wages reflect directly on material welfare (sewage collector), and some don't (orchestra members). People use wages to buy both material and non-material things.

Adam Smith defined productive labor as that directed at the production of some tangible or vendable good. But this vision of productivity seems inadequate (what about doctors, lawyers, etc.?).

One may also attempt to divide man's behavior into both economic and non-economic activities, with economic activities producing material wealth. But how do you balance these two categories? There is still an economic problem deciding between these two categories (p. 11).

Man wants both real income and leisure, but he can't get enough of both to satisfy each. He can spend time augmenting income or engaging in leisure, and may have different values for internal constituents of each category. Therefore he must choose and economize.

The conditions of human experience has four fundamental characteristics. The ends are diverse. The time and means of achieving these ends are limited and capable of alternative application. But the ends have different importance. If these ends can be ordered in importance, then behavior assumes the form of choice. Life becomes a series of trade-offs.

Not everything is exclusive, but most people are limited by time and resources. If we choose one thing we must relinquish another.

Thus economics concerns the forms assumed by human behavior in disposing of scarce means. Thus the economist... is interested in the way different degrees of scarcity give rise to different rations of valuation between them... and is interested in how the changes in conditions of scarcity ... affect these ratios (P. 16). Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses (p. 16).

Whenever an activity involves relinquishing another activity, it has an economic aspect. It's most useful in an exchange economy, though it isn't limited to it.

 

Chapter Two: Ends and Means

Economics ...is concerned with that aspect of behavior which arises from the scarcity of means to achieve given ends. (p. 24). The ends don't necessarily have to an economic flavor, but just be limited or scarce. Basically all conduct coming under the influence of scarcity has an economic impact. What the ends are is rather unimportant to the econimist -- he is more concerned with how a person chooses between scarce alternatives.

Economics isn't all about money. Money-making ...is merely the intermediate stage between a sale and a purchase. Money is a means, not an end in itself.