OUTLINES OF ECONOMICS CHAPTER I THE NATURE AND SCOPE OF ECONOMICS THE most striking characteristics of the great field of knowledge the Outlines of which we attempt to sketch in the present volume are its rich diversity and spacious amplitude. Starting from psychology in its analysis of the human needs which explain or condition wealth, it traverses the entire field of social activities and institutions arising from man's efforts to supply his material needs. It touches on one side the physical sciences, from which it borrows some of its most fundamental principles; occupies joint territory at places with politics, ethics, and law, although their respective jurisdictions are in the main distinct; and forms at once the most fertile and most thoroughly developed province of the broad science of human society. Within its borders, if we may continue to compare the scientific possibilities of economics with the natural resources of an opulent territory, opportunity is offered for the exercise of every mental aptitude and every scientific method. The historian's gift is needed to unravel the past and trace the development of the industrial institutions whose present-day problems, in turn, offer indefinite scope for the studies of the more practical student with a taste for administration or business management. For the legal mind there are the subtle problems of property, inheritance, labor legislation, and corporation control; for the mathematically inclined, insurance and modern statistics; for students with practical political interests, the tariff, currency reform, and a score of important problems in which economics and politics are inextricably interwoven; for the philanthropic, unemployment, accident insurance, and a number of social problems growing out of the maladjustments of modern industry. Animating the entire subject, blended with the love of truth for truth's sake common to all sciences, is the persistent hope that by systematic study we may eventually abolish the material poverty which deadens and dwarfs the lives of millions of our fellows. Economics is a science, but something more than a science; a science shot through with the infinite variety of human life, calling not only for systematic, ordered thinking, but for human sympathy, imagination, and in an unusual degree for the saving grace of common sense. To define such a subject adequately in a few sentences is manifestly impossible. It is frequently said that economics treats of man's efforts to earn a living, and this definition is not inaccurate if by "man" we understand "mankind," and if we fully appreciate that the individual's efforts to turn an honest penny's profit receive but little attention in comparison with the community's efforts to feed, clothe, and shelter itself. Satisfaction of social need, and not individual profit, is the objective point of the science. So, similarly, economics has been characterized as the philosophy of human industry; and this description is illuminating provided we interpret "industry" broadly enough. Even the old traditional definition, that economics is the science of wealth, is true enough if we clearly understand that there can be no wealth without man, and that the science which deals with wealth, so far from being a "gospel of mammon," necessarily begins and ends in the study of man. As we prefer to define it, however, economics is the science which treats of those social phenomena that are due to the wealth-getting and wealth-using activities of man. Economics treats of Man. The supreme importance of man in the study of wealth has not always been appreciated by those who have expounded the science. Too often they have considered man simply as a producer of wealth, the one "by whom" the necessaries, conveniences, and luxuries of life are created, whereas the infinitely greater truth is that man is the one "for whom" they are all produced. Of course no |