Question

Critically discuss wealth definition of economics as given by Adam Smith.

Answer 1

Adam Smith defined economics as “a science which inquires into the nature and cause of wealth of nations.” This wealth definition focuses on the study and accumulation of material goods that are scarce and useful. Economics, according to Smith, is primarily about increasing production of material wealth, with special emphasis on the self-interested “economic man” who strives to accumulate wealth. However, this definition has limitations: it ignores non-material goods and services, overemphasizes wealth rather than human welfare as an end, and assumes all human behavior is driven solely by self-interest, neglecting social and moral motivations. Thus, while foundational, Smith’s wealth definition is criticized for being too narrow and materialistic.