Practical Economics of the Present Day

WHEN I was a boy, political economy was taught in the old fashioned New England high school that I attended. I still possess my text-book, an abridgment of one of the old classics, and, I referred to it a few days ago. It began with the definition that "political economy is the science which investigates the' nature of wealth, and the laws which govern its production, exchange and distribution." That definition of 50 years ago strikes me still as being a good one. In college I sat under Francis A. Walker, the greatest of American economists. I still have his old text-book, which begins with substantially the same definition as Fawcett, but adds that "political economy has to do with no other subject, whatever, than wealth." As so developed economics was a dry study which captivated but few. It was characterized as the dismal science. It seemed to lead nowhither. . This was perhaps due to the inadequacy of the data available to economists. Consequently, their discussions and deduc-tions were founded largely on conjecture and assump-tions. Naturally this resulted in differences in the formulation of doctrines. There were controversies respecting the nature and influences of money, over the derivation of wages, over the principles of laissez faire (letting things take their own course) over the Malthusian doctrine, and so forth. Amid all this there was one great fundamental law universally recognized, namely the law of supply and demand, which ranks with the law of gravitation and the law of the conservation of energy among the great fundamen-tal laws of nature. The law of supply and demand is the one thing in economics upon which we may fix our eyes as upon the lode star. In the course of time we have fallen out of agreement with Walker's doctrine that political economy has to do with no other subject than wealth. Although it is indeed the science of the production and distribution of wealth we can see that many things pertain to that subject and that economics links hands closely with engineering, biology, and psychology. It is probably the recognition of this that caused the study and exposi-tion of economics to acquire such a strong sociological