Question

What are the two major limitations of Adam Smith's economics definition

Answer 1

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The limitations of economics is that it is a soft science, rather than hard. ... The limitations of economics is that it is a soft science, rather than hard. At the end of the line you are modeling relationships that lack “hard constants” (like the speed of light or the cosmological constant).

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Answer 2

Adam Smith basically described or defined Economics as an overall or general inquiry or attempt to understand the nature and causes of wealth of any nation or country.

Explanation:

Limitations of Adam Smith's definition:-

• It has been widely criticized that Adam Smith's perspective on Economics is predominantly based on the wealth factor of an economy or the constant attempt of any nation to accumulate wealth or financial gains.It ideally ignores the other attributes or factors of economic operation or existence.Hence,Smith's concept of Economics is very much narrow or parochial in its approach.
• Smith's definition of Economics does not incorporate the scarcity of resources which constitutes a major part of the concept of contemporary Economics.As described by more contemporary economic thinkers,Economics basically deals with the optimal and proper allocation of scarce resource to satisfy individual needs and demands in society,which is completely ignored by Smith.