Nature of political economy

Nature of political economy
The word economy, drawn from two Greek words, house and law, which together signify the management or arrangement of the material part of household or domestic affairs, means in its most common sense the avoidance of waste. We economize money or time or strength or material when we so arrange as to accomplish a result with the smallest expenditure. In a wider sense its meaning is that of a system or arrangement or adaptation of means to ends or of parts to a whole. Thus, we speak of the economy of the heavens; of the economy of the solar systems; the economy of the vegetable or animal kingdoms: the economy of the human body; or, in short, of the economy of anything which involves or suggests the adaptation of means to ends, the coordination of parts in a whole. As there is an economy of individual affairs, an economy of the household, an economy of the farm or workshop or railway, each concerned with the adaptation in these spheres of means to ends, by which waste is avoided and the largest results obtained with the least expenditure, so there is an economy of communities, of the societies in which civilized men live -- an economy which has special relation to the adaptation or system by which material wants are satisfied, or to the production and distribution of wealth. The word political means, relating to the body of citizens or state, the body politic; to things coming within the scope and action of the commonwealth or government; to public policy. Political economy, therefore, is a particular kind of economy. In the literal meaning of the words it is that kind of economy which has relation to the community or state; to the social whole rather than to individuals. But the convenience which impels us to abbreviate a long term has led to the frequent use of "economic" when "politico-economic" is meant, so that we may by usage speak of the literature of principles or terms of political economy as "economic literature," or "economic principles," or "economic terms." Some recent writers, indeed, seem to have substituted the term "economics" for political economy itself. But this is a matter as to which the reader should be on his guard, for it has been used to make what is not really political economy pass for political economy, as I shall hereafter show. Adam Smith, who at the close of the last century gave so powerful an impulse to the study of what has since been called political economy that he is, not without justice, spoken of as its father, entitled his great book,An Inquiry into the Nature and Cause of the Wealth of Nations;and what we call political economy the Germans call national economy. No term is of importance if we rightly understand what it means. But, both in the term "political economy," and in that of "national economy," as well as in the phrase "wealth of nations," lurk suggestions which may and in fact often do interfere with a clear apprehension of the ground they properly cover. The use of the term "political economy" began at a time when the distinction between natural law and human law was not clearly made, when what I have called the body economic was largely confounded with what is properly the body politic, and when it was the common opinion in Europe, even of thoughtful men, that the production and distribution of wealth were to be regulated by the legislative action of the sovereign or state.