1
$\begingroup$

Lionel Robbins once said, "Economics is the study of scarce resources which have alternative uses."

Would someone mind explaining what he meant by this?
I, as a naive 14 yr. old, think about this economics quote as meaning 'a person studying how to use scarce resources in any context and those resources have many uses'.
e.g. It is cold outside and I don't have enough money to buy gloves, but I do have an extra pair of socks, thus I use socks as gloves.

If you cannot understand this, please let me know and I will clear it up! Thanks for your time -

$\endgroup$
1
$\begingroup$

Robbins's famous quote can be interpreted very differently. For me, all he tried to suggest with this is that economics is the study of how you choose.

Most textbooks would say that if you have something for free, it is not a matter for economics to study. For instance, you can freely sunbathe, so the amount of time you spend sunbathing is not an economic problem. However, Robbins's definition claims that it can be a matter for economics, even if it is free. If you have to choose between sunbathing and going to the movies, the relevant resource you are allocating is not only money but also time.

In sum, given that doing A implies sacrificing doing B instead of A Lionel Robbins is defining economics as the science that studies human (purposeful?) behavior.

Btw: the original text, and, therein:

Scarcity of means to satisfy ends of varying importance is an almost ubiquitous condition of human behaviour (Robbins, 1945, p. 15)

PS: I don't believe that Robbins is suggesting that one focuses on efficiency as opposed to distribution. If the distribution affects choices, then it is a matter for [Robbins's] economics; if by distribution you are asserting that this distribution of income is better than that one, than it is true that Robbins does claim

What is of relevance to the social sciences is, not whether individual judgments of value are correct in the ultimate sense of the philosophy of value, but whether they are made and whether they are essential links in the chain of causal explanation. (Robbins, 1945, p. 90)

PPS: Reading now, this sounds too pompous, but at least I hope it's helpful:)

| improve this answer | |
$\endgroup$
  • $\begingroup$ No, it wasn't pompous - it was very intellectual and great insight! $\endgroup$ – Carlos Carlsen May 18 '16 at 13:13
1
$\begingroup$

To me, the quote seems to be about what economics is, and, more subtly, what it isn't. Robbins claims economics is about scarce resources that people can use for multiple things. The implication, and you will find this in undergraduate economics textbooks, is that economics is concerned with efficiency. Economists are simply looking for ways to make the most out of scarce resources. An outflow of this focus on efficiency is the paradigm of utility or profit optimization under constraints.

Perhaps more interesting is the subtle claim of what economics is not about: the distribution of resources. This does not seem particularly radical now, but it was much more so at the time. Keynes and Marx still dominated the political discourse in the early 20th century, and both were very much concerned with the distribution of resources. By focusing on efficiency rather than distribution, Robbins puts himself firmly in the neoliberal paradigm.

| improve this answer | |
$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.