Although the whole book which follows is but an expanded definition of economics, the student who is about to enter upon a study of the subject may well wish to have explained to him in advance, at least in rough outlines, what is the field into which he is about to enter. At the outset, therefore, let us attempt to frame some idea of the nature of the science and of the group of sciences with which it is most closely connected. Later, we can return to the subject, and, by summarizing the results of our study, arrive at a more complete definition.

The Place of Economics among the Social Sciences. First of all, economics is a social science. That is, it deals with man in his relation to society. But there are other social sciences besides that which we are about to study, among which may be mentioned political science and sociology.

The question therefore naturally arises, How is our science distinguished from the others ? To answer this question, we must consider more closely the different aspects under which society may be viewed. From the first, men in society have been busy in various lines of effort, which for convenience we may group as follows : language, art, education, religion, family life, social life, in the narrow sense of that term,1 political life, and economic life. It is with the last of these eight spheres of human activity that our science has to deal. By the term "economic life" is meant, roughly speaking, that part of human activity which is devoted to getting a living.

A peculiar feature of these activities is that they are all collective; that is, they are activities which one man cannot well carry on alone. In the case of family and political life and some of the others this is at once obvious. Careful examination shows it to be true of them all. It is for this reason that the sciences which deal with them are called social sciences.

Preliminary Definition of Economics. Economics, then, is the science which treats of those social phenomena that are due to the wealth-getting and wealth-using activities of man. It deals with all those facts about society that result from man's effort to get a living. The wealth-getting activity itself we call economic activity. The economic life, or the relations to which the economic activity gives rise, we may call by the simple word " economy." With this understanding, we may say that economics is the social science which deals with the economic life, or the economy, of man.

The Economic Unit.If we keep in mind this meaning of the term " economy," we shall see that there are economies of various sorts. Thus, the economy of the ancient Greek household with its slaves and dependents is different from

We mean what would popularly be designated as social intercourse, giving and receiving calls, conversation, etc. When we speak of going into society, we generally employ the word in this narrow sense. that of the mediaeval city or of the modern nation. In this book we study the economy of the nation as a unit, with individual, household, city, and state (in the narrow sense) as subordinate economies. We are coming, however, to regard the whole world as an economic unit.

The eight different human activities which have been enumerated cannot be entirely separated in thought any more than they are actually separate in real life. Thus legislation, though it belongs primarily to the province of political science, has an intimate bearing on economic life. Again, industry in Russia is seriously hampered by the frequent recurrence of saints' days, which have therefore great economic importance ; but these have primarily to do with religion, not with economics. In the same way, economic life is dependent upon all the other groups of human activity.

Final Definition of Economics. It is evident, then, that a complete definition of economics must be made broad enough to take note of this fact. We may sum up all these considerations in a final definition, as follows : Economics is the science (1) which treats of those social phenomena that are due to the wealth-getting and wealth-using activities of man ; and which (2) deals with all other phases of his life in so far as they affect his social activity in this respect.


1. Economics is a social science.
2. Each great department of social life has its appropriate science.
3. Economics is the branch of social science that deals with the phenomena to which the wealth-getting and wealth-using activities of men give rise.
4.Economics deals also with all the other social phenomena in so far as they affect economic activity.


1. Into what different groups may man's social activities be divided ?
2. With which group does economics primarily deal? What concern has it with the others ?
3. What have the different groups in common?
4. What is economics ?