Introduction

The Meaning of Economic History.—Economic History has been briefly defined as the study of material progress. ¹ It is the record of man’s efforts to supply his material wants, to provide himself with the elementary necessities of food, clothing and shelter. Activities of this kind are called economic (from the Greek word for housekeeping), and the things which man needs for his physical wants, but which he cannot obtain without labour or sacrifice, are called wealth. In the successive evolution of more and more efficient methods of producing wealth consists a large and important part of human progress. Much of this advance has been due to the steady growth of specialization, to the breaking up of economic activities into their three great branches of agriculture, industry and trade, to the rise of separate trades and professions, and to the minute division of functions among producers, until (to take Adam Smith’s famous illustration) a simple article like a pin becomes the combined product of a dozen men’s labour. But still more is this progress due to co-operation, without which indeed specialized production could not exist. Man has strong gregarious instincts. Unlike some of the lower animals who stalk their prey singly, he seeks subsistence in association with his fellows. Robinson Crusoe, despite his popularity with economists for illustration purposes, was not a normal human figure. Economic activities have always been social. From the earliest times the way in which wealth has been produced and shared out has been determined by some kind of agreement among the producers. The totality of customs and agreements which regulate the production and distribution of wealth in any society we call its economic system. And if we wish another description of Economic History we may say that it is the record of the economic systems of the past.