or, here again in a narrower sense, the direction of its wealth, and is thus the counterpart of what is called by pleonasm domestic economy. Therefore in a subjective sense political economy might be either an equivalent of politics, the science of government, or else of the science of state finance.

Neither the ordinary nor the etymological sense of the word corresponds precisely to the conventional scientific meaning which is now generally attached to the phrase political economy. And in truth political economy ought not to be confounded with the doctrine of the state. By an extreme hypothesis it might exist apart from a state. Neither ought it to be confounded with the doctrine of state finance, because it is concerned not only with public but with all social wealth, whether public or private, individual or collective.

Political economy, or, as it is variously called, public, social, civil, national economy, the economy of nations and of states, &c., is the science of the social ordering of wealth, that which examines its general laws in order to deduce from them guiding principles for the wise administration of public and private wealth. In other words, political economy studies the social phenomena to which wealth gives rise, with the double purpose of investigating its causes and considering its relation to public and private well-being.

Political economy has an object in common with other branches of knowledge also called economic, and these form with it a more complex science which might be called simply economy, economics, or the science of wealth. But they are distinguished from one another by differences in the aspect under which they regard their common

subject matter, wealth. And in our days, the special point of view taken with respect to any given class of phenomena is the characteristic that distinguishes one science from another and determines the position of each in the encyclopædia of human knowledge, that indivisible unity which we from mere didactic necessity divide and subdivide, unable by reason of the imperfection of our intellect to grasp as a whole the complex existence of physical and moral facts.

Political economy must then be first distinguished from domestic economy, which studies wealth in its relation to the family, seeking for the best method of regulating the patrimony in the interest of the members who compose it.

Political economy must also be distinguished from technology in the wider sense of the term, meaning the application of physical and mathematical science to separate industries, enabling producers to carry them on more profitably. And it comprehends agriculture (and the branches of knowledge connected with it), the technology of manufactures, commercial technology, and the science of those arts called liberal.

Political economy is also distinguished from industrial economy, the science of the administrative organisation of industrial affairs in respect to the interests of individual employers.

Domestic economy and industrial economy, sometimes comprised under the generic term private economy, and technology in like manner, are distinguished from political economy in that they consider economic phenomena from a different and narrower point of view than the one proper to that science, which occupies itself with general laws and social relations. Private economy and

technology, on the contrary, treat of physical laws, technical processes and relations which are merely individual.

Political economy, as a science which examines the social relations arising from wealth or from the economic activity of men united in civilised societies, is further connected with another group of sciences called social sciences because they investigate the natural laws of the formation and progress of civilised communities in general.

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But political economy only studies society in its relation to wealth, and therefore cannot claim to include in itself all the social sciences, which treat of civilised life under its various aspects, having regard not only to economic matters but also to physical, intellectual, and moral considerations, which must be held of more importance than those purely material.

However, political economy does not differ from the other social sciences simply in having a narrower field of investigation, but also in its particular mode of regarding the object which is in part common to them all, that is, the social ordering of wealth.

Hence it should be distinguished from that part of social morals which on account of its subject might be called economic and which treats of the right use of wealth in the highest interests of man, looking at it therefore in relation to the influence it may have over human conduct, either as a means or an obstacle to that exercise of virtue which is the ultimate end of morals.

Equally necessary is it to distinguish political economy from that department of civil history which is occupied with economic facts and analogous institutions, studied in their chronological order and in their outward forms.

The narration and even the explanation of concrete manifestations, though always brought into connection with a particular class of phenomena, is a very different thing from the examination of the natural laws by which they are governed. It is, for example, one thing to relate the history of English commerce in the nineteenth century, and quite another thing to investigate the laws that explain in its intimate workings the economic function of commerce at all times and in all places.

Again, political economy must not be confounded with economic statistics, a branch of applied statistics which expounds in an orderly manner the facts relating to industries, presenting them in a form which sums up their total result, and stating them where it is possible in the exact language of figures. It treats of phenomena in their external form and in their variable and contingent manifestations, not of natural laws or necessary and constant relations. The statistics of prices during the last ten years in the market of London, or Hamburg, or New York, are a very different thing from the general theory of prices.

Finally, political economy must be clearly distinguished from those legal sciences which deal with economic facts and institutions, and which comprise the whole of commercial custom and the greater part of civil law. Both these branches of jurisprudence study the rights and obligations springing from economic facts, that is from the relations of debtor and creditor, whether in their correspondence with the immutable laws of justice (philosophical law) or as resulting from legisla tion (positive law). Political economy, on the other hand, seeks for the primary causes of these same facts, and deduces from them general laws for the good guidance of

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public and private administration. It is one thing to examine the legal foundation of private property or its conditions in Italian law, another to determine its economic function, to show what are its advantages, its various aspects, and the necessary limits to it in the general interest.

From the definition of political economy already given results, not only its special mode of considering its subject, but also its twofold office, from which the exact nature of the science may be more clearly inferred. The office of political economy, or, as some would say, its function, is twofold, because it comprehends two fields of inquiry, each having special characteristics which ought to be accurately observed.

In the first place there is an economic science, in the strict sense of the word, which includes the explanation of economic phenomena and the examination of their causes and of their laws. This is the pure science, of which the object is to expound that which is, to explain theorems, to solve problems, and, as we shall see later, to construct theories by a mixed process of deduction and induction.

There exists also an economic art, an applied political economy, which from the knowledge of those natural laws which govern economic phenomena deduces guiding principles for the good management of public and private wealth, or in other words for the enlightenment of practice.

These two departments of economic theory, the science and the art, the distinction between which may be compared, as Mill says, to that between the indicative and the imperative moods, are yet strictly connected, the first being the foundation of the second, while the second in