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Economics - Definition Of The Field Of Political Economy

( Originally Published Early 1900's )



FROM what was said in the last chapter it will be seen that Political Economy treats of human desires, and the laws and conditions of their gratification under the circumstances in which men actually find themselves. But the field of human desires is by no means all included in Political Economy. Confusion of ideas often arises from not considering the limits of the subject. We therefore point out certain branches of thought which, though sometimes confounded with Political Economy, do not belong to it.

There is a wide field of investigation included under the general term Sociology, or the science of society. The Consideration of human desires in some of their aspects belongs to this field. Although the subjects treated of under the general head of Sociology all run into each other by insensible gradations, yet in that principal branch of the subject growing out of human desires we may recognize at least three divisions.

Firstly, we may inquire how human desires originate, and how they are modified by the circumstances which surround the individual. Among these circumstances are his ancestry, his education, the community which surrounds him, and the government and institutions under which he lives. But this inquiry into the origin and growth of human desires is quite distinct from Political Economy. The latter takes the man up, ready-made as it were, and has nothing to do with the question how he got to be what he is. The reason for this distinction may be seen at once by reflecting that the laws which control the formation of character are distinct from those which determine the acts of men after their characters are formed, and therefore must not be confounded with them.

Secondly, we may analyze the desires and appetites of men, investigate their various good and evil tendencies, set forth their uses and abuses, and trace their ultimate effects upon the welfare of the individual and of society. This, however, is not the object of Political Economy, but of Moral Science.

Thirdly, taking the desires and appetites just as th are, and regarding them merely as forces which impel men to action, we may investigate the laws of human activity to which they give rise. In other words, having given a community of men moved by certain desires, we trace out the laws which govern their efforts in seeking to gratify those desires. This and this alone is the object of Political Economy as a pure science.

Illustrations. As an illustration of the difference between the fields of inquiry just described, let us consider the case of a laborer who works industriously all day and then spends his earnings in strong drink.

The sociologist, who is concerned with the laws of development, searches out the history of the man and his parents, and shows how, by the hereditary transmission of appetite, by early indulgence of his morbid taste, by the influence of evil companions, and by a lack of proper mental stimulus combined with exhausting bodily labor, his present deplorable character has been formed. The results which may be gained by this investigation will be of the greatest importance to one seeking the amelioration of humanity, but they will not belong to Political Economy. The political economist looks at the pile of earth thrown up by the man's shovel, shows that love of strong drink was one of the moving forces that inspired him, and reckons how much less work would have been done if he had not expected the tavern to be open that night.

The moralist shows the man the destructive effect of his conduct upon his highest interests, and the suffering to which he exposes his family, and thus hopes to dissuade him from further indulgence.

Finding his preaching vain, the moralist goes to the sociologist for instruction. Here he learns that warnings are of no avail to one whose appetites are his master. The ever-present thirst overcomes all dread of the future. The man must, either by medical treatment or by physical restraint, be kept from gratifying the morbid appetite. The moralist desiring to employ only effective means, now appeals to the political economist to know what effect varions plans for foiling the aims of the drunkard will have. Perhaps he thinks that if he can in-duce the man's employer not to pay him in money but in bread-tickets, he will be no longer able to gratify his appetite. But the economist will point out that this plan will be ineffective, because the man can exchange his tickets for money, and thus obtain the means of buying liquor. Again, the moralist will inquire whether by levying a heavy tax on spirituous liquor and thus advancing its price the man will not be discouraged from indulging it. To answer this question the economist collects statistics showing to what extent men are prevented from indulging their appetites by increasing the cost of the indulgence. As the result of an immense collection of facts he will show the moralist that nothing can be expected from this remedy. Perhaps his conclusion would be that the higher the price of liquor the more the man would spend upon it, and therefore the less money he would have for his family.

The economist might say in conclusion, that within the range of his science no remedy could be found. His reasoning might be : " It is very clear from the man's actions that he desires strong drink more than he desires bread or clothing for his family. I know of no way in which a man can be made to accept that which he desires less in preference to that which he desires more, except positive restraint."

In all this the political economist would , not be expressing any opinion upon the good or evil of the drunkard's desires. It is his sole business to trace cause to effect, and in doing so to accept things as they exist. But it must not be supposed that his conclusions are therefore of no value to the moralist. On the contrary, what the moralist most needs is to know the ultimate effect of the different remedial measures which may be proposed. It does not follow that because a benevolent man or a charitable association desires to do good its exertions Will really result in benefiting the community. For instance, it is now very generally recognized by thinking men that indiscriminate charity is a source of evil, in that it encourages mendicancy and general helplessness. Whether all charity as actually practised does not in this way do as much harm as good is still an open question, and one which can be decided only by the investigations of the political economist.

Economical science, therefore, considers man simply as an adapter of means to ends, but does not inquire how these ends arise, nor whether they are really the ends towards which men should strive. If this limitation seems unsatisfying to the reader, he must remember that the mixing up of different branches of inquiry, is productive of confusion of thought, and that the questions whether an end is good and how an end can best be attained are totally different.

It is neither necessary nor important, even were it possible, that we should define with entire precision the point at which political economy stops in carrying out the line of investigation we have indicated. A sufficient idea of its field may be given by saying that it includes the general subject of the laws of human welfare so long as we consider welfare to be only the gratification of desires.

Wealth being directly or indirectly a potent instrument for commanding objects of desire, political economy is sometimes called the Science of Wealth.

Again, objects of wealth being nearly all obtained by purchase and sale in public markets, the science has also been called the Science of Exchanges.

"Economics" is a term introduced by recent English writers which has the double advantage of brevity and of avoiding the serious objections brought against the current term Political Economy.



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