THE SCOPE AND METHOD OF POLITICAL ECONOMY 



BY JACOB H. HOLLANDER 



[Jacob H. Hollander, Ph.D., Professor of Political Economy, Johns Hopkins 

 University, b. Baltimore, Maryland, 1871. A.B. 1891, 'and Ph.D. 1894, 

 Johns Hopkins University. Assistant, 1894-95; Instructor, 1895-96; Asso- 

 ciate, 1896-99; Associate Professor of Finance, 1899-1900; Associate Pro- 

 fessor of Political Economy, 1901-04, Johns Hopkins University; Secretary 

 of United States Bimetallic Commission, 1897; Chairman of Municipal Light- 

 ing Commission, Baltimore, 1900; Special Commissioner to revise the laws 

 relating to taxation in Porto Rico, 1900; Treasurer of Porto Rico, 1900-01; 

 Special Agent on Taxation in the Indian Territory, 1904. Member of Ameri- 

 can Economic Association; American Statistical Association; British Eco- 

 nomic Association; American Academy of Political and Social Science; 

 Maryland Historical Society; American Jewish Historical Society. Author 

 of The Cincinnati Southern Railway, A Study in Municipal Activity; The 

 Financial History of Baltimore. Edited Letters of David Ricardo to J.R. McCul- 

 loch; Letters of David Ricardo to Hutches Trower (with James Bonar, Ph.D.); 

 Studies in State Taxation; reprint of economic tracts; and has made numerous 

 contributions to economic journals and other serial publications.] 



THE development of economic thought has been affected at inter- 

 vals by more or less formal consideration of the relative extent of its 

 subject-matter and the proper scope of its inquiry. Originally con- 

 ceived as the art of domestic government, political economy became 

 at the hands of the Physiocrats and their immediate precursors 

 a systematic study of the phenomena of wealth. Two influences, 

 emanating from the philosopher-scientists of the early eighteenth 

 century and together summed up in the historic ambiguity of the 

 term " natural," contributed to this end. First, the existence of 

 economic uniformities was asserted; and second, the possibility of 

 basic rules of social conduct was assumed. Similarly, Adam Smith, 

 starting from an academic discussion of " Police," in logical devel- 

 opment of the teachings of Pufendorf and Hutcheson, passed, with 

 growing sense of the importance of the subject and under the personal 

 stimulus of the Economistes, to a full consideration of national well- 

 being. Professor Sidgwick has pointed out how this transition from 

 political economy as an analysis of wealth phenomena is actually 

 crystallized in the Wealth of Nations. Explicitly denning the pur- 

 pose of economic study as the first, Adam Smith in fact devoted 

 the bulk of his treatise to an analysis of public well-being. 



This drift of political economy away from rules of economic admin- 

 istration to an analysis of wealth phenomena was aided by the 

 intellectual reaction that followed the excesses of the French Revolu- 

 tion. Economic doctrines and, preeminently, the doctrines of the 

 new economic liberalism, were identified throughout Europe with 

 French principles and the revolutionary spirit. In 1793 three 

 years after Adam Smith's death Dugald Stewart still hesitated to 



