3. Why often called political the economist as a scientist is concerned altogether with the thlderstanding of phenomena, nevertheless it has often happened that his conclusions have been helpful to statesmen in shaping the trade and indus trial policies of a nation. Indeed, the so-called father of political economy, Adam Smith, made his famous study of the subject for the purpose of discovering those policies of trade and production which were best adapted to enrich a nation. That is why he called his book, published in 1776, "The Wealth of Na tions," a book which so greatly emphasized the ad vantages of free trade that England in 1846 aban doned its historic policy of protection.
Because of this intimate relation between the con clusions of the economist and the welfare of a nation the science was commonly known as political economy for a hundred years after Adam Smith. That name, however, has been less used in recent years for the reason that modern economists are not, as a rule, politicians or statesmen and probably do not wish to have their efforts even seem to be colored by partisan ship. The economist, like the chemist or any other scientist, tries to find the truth and not to defend this or that policy. Just as the physical sciences have shown the way to more productive farming, more hygienic cooking, and more sanitary ventilation, so the discoveries and demonstrations of the economist are pointing the way to a wiser distribution of wealth, to better banking systems, and perhaps even to the abolition of poverty. When his work is considered in this aspect it is quite natural to call his science political economy, just as the Germans call it na tional eco'nomy.
4. English classical economy is essentially a modern science. Prior to Adam Smith's time there had been much vague and rather unscien tific discussion and writing about the problems which we now call "economic," but the ideas and conclusions of the authors of the earlier centuries would be deemed almost valueless at the present time. One group cif writers known as the "mercantilists'? exaggerated the importance of gold and silver, and held that a na tion's wealth was best measured by the amount of precious metals in its possession. It was their view that a country should seek by every possible device to enlarge its exports and reduce its imports to the mini mum in order that foreign nations should be com pelled to sefid it gold and silver.
A later group of writers called the "physiocrats," most of whom lived in France, attacked the reason ing of the "mercantilists" and emphasized the im-, portance of agriculture. The sources of a nation's wealth, they held, lay in Mother Earth and not in trade.
Adam Smith discussed the subject of wealth pro duction and distribution more clearly, comprehen sively and logically than any preceding writer. His successors in England during the next hundred years created a rich literature in economics, elaborating and amending his views. These writers are com monly referred to as the English Classical School of r. The most important of them A‘TrFre—Thomas Malthus, famous for his "Theory of Population," published in 1798; David Ricardo author of "Principles of Political Economy," published in 1817, a successful business man who retired in middle life and devoted himself to economic studies, achieving distinction because of the remarkable clearness and vigor of his thought, especially when treating the subjects of rent and money; and John Stuart Mill, a distinguished Eng lish philosopher, whose "Principles of Political Econ omy," published in 1847, is the crowning work of the English school and is probably the greatest treatise on economics that has ever been written despite the fact that many of its conclusions are rejected by many modern writers.
Mill and his colleagues of the English school treated economics as a science of wealth. They thought of wealth as consisting of all desirable com modities the supply of which was less than the de mand. Since their discussions were especially con cerned with the production and consumption of ma terial commodities, the science of economics fell into disrepute in many quarters as being materialistic.
5. Austrian and historical schools.—About 1880 certain writers in Austria began to develop the science from the human side, starting with a study of the nature of human wants. They placed greatest em phasis, not upon material wealth, but upon psycho logical income. The gratification of human wants, they proclaimed, is the real aim of labor and enter prise, and this is attained as well thru labor or serv ices which give men satisfaction but create no tangi ble, material products as thru labor which does create such products. The views of the so-called Austrian school have greatly influenced the thinking of all modern economists, and ,have served to throw light into many dark places. For example, the English classical economists taught that labor which produced no tangible commodity was unproductive. In their opinion, the farmer and the manufacturer were pro ductive laborers, but lawyers, bankers, merchants, preachers, teachers, artists and musicians were unpro ductive. It is now plainly seen that such a division of the different classes of workers cannot be made. All are equally productive if they succeed in render ing a desired service.