Definition of Growth
The growth-oriented definition of Economics was given by Professor Samuelson. He stated, “Economics
is a study of how people and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses, to produce various commodities over time and distribute them for consumption now and in the future among various persons and groups of society.”
Features of Samuelson’s Growth Definition of Economics
Dynamic problems of production: Economic growth is measured by the change in national output over a period.
Economics is concerned with determining the method of using scarce resources to produce commodities over a period. Thus, the dynamic issue of production has been brought within the
purview of Economics.
Dynamic allocation of consumption: It is concerned with the method of consumption now and in the future. Thus, the problem of dividing the use of income between current and future consumption has been included in this definition.
Distribution of consumption: It is concerned with the distribution of consumption among various individuals and groups in a society. Initially, the problem of distribution was not clear but the modern definition makes it a more understandable concept.
Improvement of resource allocation: The definition also says that Economics analyses the costs and benefits of improving the method of resource allocation.
Economic and Non-economic Activities
An economy is a system that provides people with goods and services and directly or indirectly satisfies their wants.
Economic activities are the set of activities carried out by human resources to satisfy their needs. It is essentially concerned with the production, exchange, and consumption of goods and services. For example, businessmen may make a profit or experience a loss, while laborers receive wages and salaries as remuneration of services rendered by them.
Activities that have no economic elements or are not concerned with money and wealth are known as non-economic activities. There are various types of non-economic activities such as social activities, political activities, religious activities, charitable activities, parental activities, and recreational activities. Examples of social activities are organizing marriage parties, attending birthday parties of friends and relatives, while examples of political activities are meetings of various political parties such as the Congress, BJP, and ADMK.
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