The Principles of Political Economy

Henry Sidgwick


Chapter 2

The Scope of Political Economy

§5. At the same time, though in discussing the conditions more or less favourable to Production we inevitably approach the margin which divides Art from Science, I have thought it expedient to reserve as much as possible for a separate inquiry the discussion of the principles of governmental interference with industry:---whether with a view to a better organized Production or a more satisfactory Distribution of wealth: since I conform so far to the older and more popular view of my subject as to consider the discussion of these principles an integral part of the theory of Political Economy. This discussion, then, will occupy the main part of a separate and final book on ``Political Economy considered as an Art''. The Science of Political Economy, as it is ordinarily conceived in England, forms the subject of the first two books, on (1) Production and (2) Distribution and Exchange, respectively. The precise manner in which I distinguish and connect these three topics, and the grounds on which I have combined the theory of Exchange with that of Distribution, will be better explained somewhat later.

Besides the subjects above mentioned, economists since Say have often introduced, as a separate department, a discussion of the laws of Consumption; and the indispensability of such a discussion has been strongly urged by Jevons; who goes the length of saying that ``the whole theory of Economy depends upon a correct theory of Consumption''. I quite agree with Jevons as to the fundamental importance of certain propositions relating to Consumption; and I also think that their importance has not been adequately apprehended by many recent writers. Still, it has appeared to me most convenient, in such a treatise as the present, to introduce these propositions in discussing the questions relating to Production, Distribution and Exchange which they help to elucidate: I have therefore not thought it necessary to bring them together under a separate head.

Before concluding I may observe that the current use of the adjective ``economic'' affords a good illustration of what has been said above of the essential difference between Production and Distribution when considered from the point of view of Art or Practice. For when the word ``economic'' is used either along with such terms as ``gain'', ''loss'', ``advantage'', ``drawback'', or as a term of approval implying gain or advantage, it always refers to the relation of cost or expenditure to the quantity of some result attained by it. An arrangement ``economically'' preferable to some other is one that produces either a given result at a less cost or a greater amount of a certain kind of result at no greater cost: there is an ``economic gain'' when either cost is saved or produce increased, and an ``economic loss'' when the reverse of either process occurs. There is no similar use of the term to imply an ideal system of distributing wealth; we should not, for instance, speak of laws relating to property as economically advantageous or desirable, meaning that they led to a right division of property. We might no doubt speak of an ``economic'' distribution of wealth, no less than of labour; but this is really a confirmation of the view just stated; since in so speaking we should be understood to be assuming that the end of the distribution was to produce the greatest possible amount of happiness or satisfaction, and affirming that the arrangement spoken of as ``economic'' was well adapted to this end.

This peculiar use of the adjective ``economic'' should be carefully noticed; as it is almost indispensable, while at the same time it is a little liable to confuse the reader.

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