Political Economy

Political Economy, early term for economics, first introduced in the 17th century. Used by Adam Smith, David Ricardo, John Stuart Mill, and other founding fathers of economics, the term emphasizes the historical context of the formation of the early European nation-states, in which the discipline was seen as a branch of government. Adam Smith regarded political economy as the study of “the nature and causes of the wealth of nations”, but contemporary mercantilism, and to a lesser extent the theories of the French physiocrats, had a clearly political bias towards the enrichment of the state to enhance its prestige and capacity for war. The term was supplanted by economics during the 20th century, concurrent with the discipline's expansion as a social science and its emancipation from political thought.