Economics is a science which covers so wide a field that it has been found desirable to divide it into parts, each of which is often treated by writers in separate works or in separate volumes of the same work. It may help the student to have outlined for him, in advance, the divisions as they will be presented in this work.

First of all, it has been deemed well to present to the student in the opening chapter an idea of what the science is, and to show him, as is being done in the present chapter, what are the main topics with which the science is concerned. In another introductory chapter there is presented a discussion of some of the fundamental institutions in our social order.

In the second place, it is thought advisable to give in a few chapters a skeleton outline of the economic history of mankind, with more particular attention to those late developments in English and American economic history which have given rise to existing economic conditions. This part of the subject is often omitted from elementary text-books, and therefore a word of explanation is here in place.

Few students undertake the study of economics without having pursued courses in history; but the histories usually studied in schools are devoted in great part to other than economic considerations, and are written from another viewpoint than that which should be ours in our present study. It is of the utmost importance that the student should approach the study of present economic conditions with the historical spirit. As the chapters in economic history will show, social and economic institutions are not permanent, but constantly changing; and to understand aright what is, we must know whence it has developed, and, so far as we can, whither it is tending. Moreover, the study of economic history should show the student, as perhaps nothing else can, that great changes in the economic condition of a nation or a class do not come about in a moment at the command of an individual or of a great number of men organized in a state, though the action of the individual and of the state are powerful forces.

The way will thus be made clear for that which is more commonly presented in text-books under the name of economics or political economy. An analysis of economic phenomena at any time shows that these may be divided for purposes of clearer study into four main parts : first, those connected with man's consumption of goods, or, in other words, with the satisfaction of his wants ; second, those connected with the production of goods ; third, those connected with the exchange or transfer of goods among men ; and fourth, those connected with the distribution of the income of society among the individuals, classes, and factors of production which cooperate to create that income. By dividing thus the general subject of economic theory, we are enabled to look at man's economic life from four points of view. The four divisions which we have indicated are usually treated under the following headings: consumption, production, transfers or exchange, and distribution. Following the practice of several recent writers, we shall discuss them in the order given.

Certain socio-economic problems of great present interest will, on account of their special importance, be treated at considerable length in those divisions of the general subject to which they have a logical relation. Thus, under the head of transfers or exchange, we shall discuss the subjects of monopolies, bimetallism, and pro-tective tariffs, and under the head of distribution, many of the practical problems concerning labor and wages.

Finally, the financial relations and operations of government, national, state, and local, are of a nature so important to the welfare of the citizen, and in some respects so peculiar, that it is thought well to treat them separately in chapters devoted to the subject of public finance.


1. For convenience of treatment, economics is usually divided into several different fields of study.
2. The present book begins with an introduction explaining the nature and scope of the science.
3. A sketch of economic history is given to prepare the student for a better understanding of present conditions and problems.
4. Economic theory is presented under the four general headings: consumption, production, transfers (or exchange), and distribution.
5. A short presentation of the subject of public finance is added to give the student a more complete idea of the nature of economics.


1. What subjects are discussed in the introductory chapters of this book?

2. Why is it thought well to include economic history ?
3. What are the usual main divisions of economic theory? In what order are they given in this book ?
4. Of what does public finance treat? Why is it included in this book?


A comparative study of general treatises with the object of noting differences in the order of treatment will be found of service in fixing in the student's mind the nature and scope of economics.