Page:The New International Encyclopædia 1st ed. v. 16.djvu/224

POLITICAL ECONOMY. tion which holds that value determines the expenses of production rather than the expenses of production value, that capital receives its value from the finished product, and not vice versa, etc. The whole tendency of this theory (see ) has lx>en to sliift the centre of gravity in economics from the capitalist to the consiiiiier and to block the movement to confine political economy to a study of exchange value. It has undoubtedly clarified our general conce|)- tions of wealth and exchange nuich in the same way that the theory of evolution lias clarified our general conception of progress. ScorK AM) Method. Relation of Political Economy to Sociolouy. The most inclusive and fundamental question of scope is the relation of political economy to the general science of human association. Two extreme views of this relation have been maintained: (1) that because of the intimate and inseparable connection between all forms of social activity, the study of economic phenomena cannot be divorced from the general study of sociology (e.g. Comte, 11. von Sclieel, Ingram) ; (2) that political economy is an abso- lutely independent science, dealing with the phe- nomena of wealth alone (e.g. Senior, Mill, Cairnes). At the present time there is a strong consensus of opinion that both these views are ill advised. While it is now admitted with prac- tical unanimity that political economy is a social science, the bewildering com])lexity of social phe- nomena, together with the slow progress of soci- ology' conceived as the general science of human association, has deeply strengthened the convic- tion, borne out in otIuT departments of scientific investigation, that specialization and the isola- tion of ])henomena are indispensable. The Hklation of Political Economy to Eth- ics, Law, and Politics. Tn discussing this ques- tion attention may be confined largely to the rela- tionship between ethics and political economy, since the <lecisive arguments apply to all tliree re- lationships. Substantial unanimity exists upon the following points; («) that ethics and economics are, for purposes of investigation at least, two dis- tinct sciences; their fields are not coextensive; (6) in applied political economy we nuist take ac- count of ethical requirements; no economist would maintain that in actual life men are "freed from the ordinary obligations of justice and humanity;" (c) in so far as ethical forces alTect economic activity, economic science' must take account of these forces. The point at issue is the question whether the scientist, as scientist, is permitted or compelled to set up ideals and pass ethical judgments. The following reasons may be given for the conclusion that it is prac- tically impossible for the scientist to abstain from passing ethical judgments: In the first place, every rational adilt understands and ac- cepts certain axiomatic ethical canons which in their practical application are universally ac- cepted (e.g. that the satisfaction of hunger is a good thing). In the investigation of actual economic phenomena, such as the housing and food of the laboring classes, conditions arc con- stantly met with that violate these ethical canons. It would be the sheerest pedantry nnder these conditions to refrain from passing ethical judgments. Secondly, an essential part of eco- nomic science is that subdivision which treats of economic progress. In economic life what ought to be done is intimately dependent upon what can be «lone; in other words, the law of economic growth is a powerful, if not the most powerful, factor in determining economic aims and ideals. If the fully {•c|uippcd economist is forced to study economic growth and to t'Xplain economic move- ments and tendencies, it follows that he is forced to express opinions upon approximate economic ideals, and after having furnished the decisive arguments for ethical judgments, he must either apply his results or have some less (pialilicd ])erson apply them for him. Additional reasons appear when we examine such subjects as laxa tion or those public ]iriccs which the law declares must be just and reasonable. In the considera tion of railroad rates, for instance, the economist is not only compelled to pass judgment upon what is just and reasonable, but he discovers u|)on investigation that economic considerations supply the most important factors in determin- ing this judgment. There is, then, a broad zone of territory between ethics and economics which the moralist has not worked — and which for the science of ethics is (irobably unimportant — l)Ut which the economist must clear up l>efore he can go on with his work. The assertion that the science of political economy may and should refrain from passing ethical judgments rests upon two misapprehensions: (1) the failure to grasp the fact that society is like an organism in that it is subject to a law of ordered change, which to a certain extent is under the control of the or- ganism itself: (2) an illogical conclusion from the recognized truth that certain suljdivisions of economic investigation (e.g. fixation of prices in wholesale markets) nmy be exploited quite tlior- inighly without determining economic ideaN. and without introducing ethical considerations. From this it is logical to conclude that certain minor subdivisions of ))olitical economy may be inves- tigated "without passing ethical judgments," hut illogical to conclude that the whole science may be so investigate<l and formulated. The above con(dusions are strengthened when we consider the rehilion of economics to law or politics. In describing the progress of the past or the condi- tions of the present we are forced to pass judg- ment upon the economic success or failure of many laws and policies (e.g. tariff laws) which are still in force or under active consideration, and which will be indorsed or repudiated solely or largely upon economic grounds. Hecause of this fa<'l the economist cannot refrain from judgment upon laws and political policies. Nor without being ridiculous can he refrain on occa- sion from laying down precepts. (Jreshani's law, for instance, is at once a law iyid a precept when a proposition to maintain a more valuable and a less valuable money side by side in cir culation is under consideration. In conclusion it may be said that while political economy does not tindertake the complete study of law. ethics, ))olitics, etc., it must consider systemat- ically the parts of those sciences which materially afl'cct economic phenomena. It is neither pos- sible nor desirable that the line of demarcation should be rigidly drawrj, particularly in the applied science or art of political economy, which may be defined as the application of economic laws to the solution of those practical problems in which economic considerations are of predominent importance. Relation to Other Sciences. Political econ- omy is probably more dependent upon history than