POLITICAL ECONOMY. This word economy is derived from the Greekfor houe-law or house-regulation. It refers to the material portion of domestic regulations, and does not, for instance, embrace the observance of religion or the communication of instruc tion. The most important part of it is the adjustment of the expenditure of the house hold to the income at their command. Hence the word economy is sometimes applied, both in a public and a private sense, to the saving of money. The term " political " came to be used along with it as a convenient method of expressing the application to a state of a sound system of management in relation to its affairs. In later times, how ever, the word, as applied to a community, came to be something totally different from its application to a household. It was thought that one•eould regulate a people just as a house is regulated, by adjusting the spending and the getting of the national wealth. Thence arose several doctrines now discarded—such, for instance, as " the balance of trade," which taught that the trade with any nation is only profitable when you sell more to that nation than you buy from it; the system of bounties upon special trades, as being more profitable to others; and lastly, the system of protection to native industry— the last relic of what may be called the positive school of economists. Political economy now means, not the art of regulating communities in this respect, but the science of those laws which Providence has established for their regulation. Thence the analogy with domestic economy ceases. Domestic economy is the positive regulation of a household —not the leaving of it to hollow its own dictates; and, indeed, that there is a disposition, more or less iu the head of every house, to limit its expenditure to its income, is one of the phenomena by which things right themselves, as it were, and make up those laws of nature which constitute political economy. A man knows that if he buys too much, he
will become bankrupt; but we do not now order the wholesale merchant not to buy too much from this or that country, so as to place the balance of trade against us—we 'know that this naturally rights itself, because we must expect our own produce to pay for what we bring in. Even if we should have to pay for it in gold, that is 'a com modity produced by our people. The income and expenditure of the government, as apart from that of the people of the community, are of course under regulation like those of a household; but these form a separate field of operation, called finance (q.v.). There are a few people who still hold that there is no natural system sufficient in itself to regu late the material affairs of mankind, and that these should be committed to the hands of special managers. Finding the approved doctrines of political economy going further and further front their direction, such persons, though few in number, have been very absolute in their views, and zealous in pushing them. One class of these are called socialists; and another, who go further lengths, are called communists. It has not been considered necessary here to go beyond the mere description or definition of the nature of political economy, because the various parts of which it consists are given each under its own head, as 'BOUNTY, CAPITAL, COLONY. COMMUNISM, COMPETITION, CORN LAWS, DEMAND AND SUPPLY, EXCHANGE, FREE TRADE, LABOR, 31,0NOPOLY, NAVIGATION LAWS, BENT, VALUE, etc.