POLITICAL ECONOMY 



systematic and comprehensive study of the pheno- 

 mena con.iected therewith. There have been 

 economic facts therefore ever since the origin of 

 man; but there was no real science of potttfad 

 economy till it was constructed by Adam Smith 

 and his forerunners in France in the 18th century. 

 Science generally is the systematic studv of facto 

 which existed before the study began. Yet, while 

 political economy did not exist as an independent 

 and comprehensive branch of human knowledge 

 before the 18th century, much attention had been 

 given to particular economic facts. Various econo- 

 mic problems had received great and serious atten- 

 tion. 



The history of political economy naturally falls 

 into three divisions, the ancient, the mediteval, and 

 //( modern. We shall treat them briefly in their 

 order. 



(1) The Ancient Period. As in other sciences, 

 the first notable effort* in economic reflection were 

 made by the ancient Greeks. The leading Greek 

 thinkers who handled economic questions were 

 Plato, who in the economic as in other spheres 

 represented the idealism of the ancient world ; 

 Aristotle, the exponent of scientific realism ; and 

 Xenophon. who expounded the plain common sense 

 of his time and country.' Of the problems which they 

 treated with the insight peculiar to their race we 

 may mention the following : the economic aspect s 

 of the origin of society ; the division of labour ; 

 the function of money ; economics of slavery, which 

 they considered a natural thing ; property and the 

 related question of communism ; the dependence 

 of political change and of revolution ou economic 

 causes ; the population question. On these and 

 other subjects the teaching of the great Greek 

 writers is most valuable ; nor is ii - value lessened 

 by the fact that their discussion of economic facts 

 forms only a part of the science of politics. And, 

 while the conditions of the modern world dilfcr so 

 vastly from the Greek world, the economic views 

 of thinkers like Plato and Aristotle will always 

 have an interest for us, inasmuch as tlie solid 

 groundwork of human nature continues snbstan- 

 ti.-illy the same through the changing conditions of 

 history. 



Roman economics had no special inteicst or 

 originality. The main contribution of the liomans 

 in connection with political economy was to give 

 legal form to the prevalent ideas of property. 



(2) The Medieval Period. During tliis period 

 there was little discussion on economic problems 

 that could now be called scientific. The most 

 interesting feature of the economic views that then 

 existed was the influence exerted on them liy 

 Christian teaching. This influence was most pro- 

 found and greatly affected also the economic think- 

 ing of sulmeqiient times. The influence of Chris- 

 tianity was especially manifest in relation to the 

 weak and oppressed classes. It tended to soften 

 and then to abolish slavery and serfdom ; it raised 

 the position of women ami gave a new refinement 

 to family life ; the care of the poor became a first 

 duty of men and of human institutions. The ideas 

 and institutions of property prevalent in the Hoiuan 

 world, which were often Wish, severe, and cruel, 

 were corrected by the spiritual ethic- of ('hrili- 

 anitv. To the struggling and half barbarous feudal 

 worm it taught a nobler life and a higher con- 

 ception of duly ill the economic us in other spheres. 

 It inculcated righteousness and charity, forbade 

 UHiirv and luxury, exalted poverty and resignation. 

 In tneir opposition to the rigorous ideas of pro- 

 perty some of the Fathers even advocated com- 

 munism. The mediicval period was a time of 

 confused struggle, in which Christian ethics were 

 often opposed not only to the rough and warlike 

 egoism of the feudal races, but to the harsh 



economic ideas that were incorporated in tiie 

 Roman law. 



(3) The Modern Period. The feudal communi- 

 ties were superseded by centralised monarchies ; 

 and this great political change was an organic 

 one, being attended by important changes in other 

 spheres. The church lost much of its power. The 

 feudal nobles were transformed into conn iers. The 

 feudal militia gave place to professional armies in 

 the pay and in the immediate service of the monarch. 

 For the maintenance of the army and of the court 

 and other dependents of the centralising ruler it w a- 

 necessary first of all to have a sufficient revenue. 

 And, as the old revenue in kind was neither con- 

 venient nor effective, it was found particularly 

 desirable to have a revenue in money. Accord- 

 ingly it was one of the greatest ami most pressing 

 functions of the statesmanship of that time to foster 

 and to secure an ample revenue in money. The 

 rise of the Colonial System (q.v. ) consequent on the 

 di-covery of America and of the sea-route to India, 

 the great expansion of commerce thence resulting. 

 the growth of manufactures, the development of 

 the banking system, all these were regarded as 

 elements in the strength of the centralised state, 

 and were made subservient to its policy. Under 

 these circumstances it was natural that special 

 attention should he paid to the balance of trade ; 

 that trade should be so regulated by statesmen as 

 to secure for their own country a good balance of 

 the precious metals. Thus it became a special 

 note of economic theory to place an exaggerated 

 value on the precious metals. The Mercantile 

 System ((jj.) was an expression of this exaggeration 



in the sphere of political noiuy. Kconomists differ 



as to the precise meaning and application of the 



phrase, and indeed it had no very precise meaning 

 or application. The meaning of the phrase \\ill 

 naturally vary according as we confine the applica- 



tion of it to the exaggeration to which it s]MTifi- 

 cally relates or extend it to the whole system of 

 which the exaggeration was a conspicuous feature. 

 But there can be no doubt that the system grew 

 out of the needs and circumstances of the time. 

 Its chief expounders were Itodin and Moutcliretien 

 de Vatteville in France, Antonio Sena in Italy, 

 and Thomas Mun in England. In practical states- 

 manship it is associated chiefly with the great 

 names of Cromwell and Colliert. 



Even during the prevalence of the mercantile 

 s\ste.m a new wav of thinking on economics had 

 arisen in England ami France. Its keynote was 

 freedom, and it too was an organic part of the 

 social and political evolution of the time. The 

 expounder of the new system was Adam Smith, 

 but he Has only the chief representative and cul- 

 minating point of a movement which had been 

 growing for more than a century. In England 

 men like l.ocke. Joshua Child, William 1'etty. and 

 Dudley North had IM-CII struggling more or less 

 successfully toward.- a similar point of view. In 

 France the school of Physiocrats, headed by ( ( lucs 

 nay, had taught many of the new ideas ; in par- 

 ticular they had been set forth with perfect lucidity 

 and conciseness by Turgot in his 1,'i/li.imni xiu- In 

 h'nriiKitinn it In jtisfrilnitinii ilfx Itn-hi .v.v '.\ ( 1 ~Wi \. 

 In fact, Tnrgot's little Ixuik might l>e ivgarde.i 

 the first scientific expedition of political economy. 

 Adam Smith's achievement was to give the lii 

 form to ideas which were becoming current among 

 the most progressive minds of his time. If Tnrgot's 

 work may )>c regarded as the first brief statement 

 of |M>litical economy, Smith's Wealth of Xtion.i 

 was the first thorough and comprehensive ex]>si- 

 tion of the subject by a man who bail ample leisure 

 and capacity, a remarkable knowledge of history, 

 and an adequate philosophic training. 



The teaching of Adam Smith was by himself wed 



