§ 6. Subdivisions of economics. Economics in its most general sense includes various subdivisions. First is domestic economics (household economics), the modern equivalent of oiko-nomos, first used by Xenophon as the name for a set of rules to help the housekeeper or steward of an estate. The typical Greek household, however, was a large estate with slaves, almost a little state in itself, carrying on nearly all the arts and crafts. The term political economy (as economic politigue) was first used in France in the eighteenth century to express the set of rules or principles to guide the king and his counselors in the control of his country, which was thought of much as if it were the king's private estate. Of late the term "economics," as expressing better a broadening con ception of the subject, and at the same time as less likely to be confused with politics, has been gradually displacing the term political economy. It is used with various adjectives in dicating the field covered; for example, domestic economics, household economics, corporation economics, national econom ics, political economy, world-economy, etc.
§ 7. Economy in the sense of the subject studied. We have chosen for our purpose to define economics as a "study," a body of knowledge, a science. But as in the case of various other sciences, its name is used also to indicate the body of facts and group of persons which are studied. One person (like Robinson Crusoe, on his desert island) constitutes an in dividual economy. There are, in such a case, no personal rela tions to study, but only the relations of man to his environ ment. A group of persons thought of together with all their material environment and in their relations with each other, forming something of an economic unity, constitute a social economy. The economic affairs of a family constitute a family or domestic economy, and those of a nation a political, or a national, economy.
§ 8. Economy not parsimony. It should hardly be neces sary to warn against giving to the word "economy" the mean ing of (the act or the quality of) parsimony. Economy im plies good management, making the best of whatever means one has, and this is not stinginess, tho the thriftless and the self-seeking are always prone to impute it as such to others. Economy as a mode of action is parallel to economics as the science that seeks to arrive at such general rules and principles as will lead to the best results in the use of the resources and services of individuals, families, and nations.
It is true that there are different standards by which to judge what is "best"; sometimes a merely pecuniary stand ard of business profit to the individual is taken, and this may come close to mere avarice. Again, a standard of true
welfare for the nation or for the race may be taken. These two views may be, and often are, in conflict, and it is a part of the task in this study to keep before the mind as clearly as possible the difference between these standards. The one standard is that of individual—pecuniary, acquisitive eco nomics ; the other that of public—industrial, productive eco nomics.' § 9. Social aims of economics. Economics is often defined as the science of wealth. Partly because of this, and partly because of the unfortunate confusion of the individual and of the social points of view, it has been characterized as a "gospel of Mammon." But, in the main, economics must be under stood as a social study for social ends, not a selfish study for individual advantage. The individual interest must be recog nized, but treated as within, and subordinate to, the larger social interests. Certainly some of the lessons of economics may be of practical value to men in active business, and training in economics is increasingly deemed a helpful prep aration for many special callings. Many economic "princi ples" are but the general statement of those ideas that have been approved by the experience of business men, of states men, and of the masses of men. Economics is not dreamed out by the closest philosopher, but more and more it is the attempt to describe and comprehend the interests and the action of the practical world in which men must live. Many men are working together to develop this study—those who collect statistics and facts bearing on all kinds of practical affairs, and those who search through the records of the past for illustrations of experiments and experiences that may help us in our life to-day.
§ 10. Economics in a democracy. With the growth of the modern state, with the increasing importance of business, and of industrial and commercial interests, as compared with changes of dynasty or the personal rivalries of rulers, eco nomic questions have grown in relative importance. In our own country, particularly since the subjects of slavery and of states' rights ceased to absorb the attention of our people, eco nomic questions have pushed rapidly into the foreground. In deed, it has of late been more clearly seen that many of the older political questions, such as the American Revolution and 1This distinction is developed in Part VI, especially in ch. 39.