PART II
CHAPTER VIII
POLITICAL ECONOMY
I. Objects and Methods
Political Economv is, In the widest sense, the science of the laws controlling the production and exchange of the material necessities of life in human society. Production and exchange are two entirely different functions. Production may exist without exchange, exchange—since there can only be exchange of products—cannot exist without production. Each of the two social functions is controlled by entirely different external influences and thus has, generally speaking, its own peculiar laws. But on the other hand they become so mutually involved at a given time and react one upon the other that they might be designated the abscisses and ordinates of the economic curve.
The conditions under which men produce and exchange develop from land to land, and in the same land from generation to generation. Political economy cannot be the same for all lands and for all historical epochs. From the bow and arrow, from the stone knife and the exceptional and occasional trading intercourse of the barbarian to the steam engine with its thousands of horsepower, to the mechanical weaving machine, to the railway and the Bank of England is a tremendous leap. The Patagonians do not have production on a large scale and world-commerce any more than they have swindling
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