Political and Cosmopolitical Economy
Before Quesnay and the French economists there existed only apractice of political economy which was exercised by the Stateofficials， administrators， and authors who wrote about matters ofadministration， occupied themselves exclusively with theagriculture， manufactures， commerce， and navigation of thosecountries to which they belonged， without analysing the causes ofwealth， or taking at all into consideration the interests of thewhole human race.
Quesnay (from whom the idea of universal free trade originated)was the first who extended his investigations to the whole humanrace， without taking into consideration the idea of the nation.Hecalls his work 'Physiocratie， ou du Gouvernement le plus avantageuxau Genre Humain，' his demands being that we must imagine that themerchants of all nations formed one commercial republic.Quesnayundoubtedly speaks of cosmopolitical economy， i.e.of that sciencewhich teaches how the entire human race may attain prosperity； inopposition to political economy， or that science which limits itsteaching to the inquiry how a given nation can obtain (under theexisting conditions of the world) prosperity， civilisation， andpower， by means of agriculture， industry， and commerce.
Adam Smith(1*) treats his doctrine in a similarly extendedsense， by making it his task to indicate the cosmopolitical idea ofthe absolute freedom of the commerce of the whole world in spite ofthe gross mistakes made by the physiocrates against the very natureof things and against logic.Adam Smith concerned himself as littleas Quesnay did with true political economy， i.e.that policy whicheach separate nation had to obey in order to make progress in itseconomical conditions.He entitles his work， 'The Nature and Causesof the Wealth of Nations' (i.e.of all nations of the whole humanrace).He speaks of the various systems of Political economy in aseparate part of his work solely for the purpose of demonstratingtheir non-efficiency， and of proving that 'political' or nationaleconomy must be replaced by 'cosmopolitical or world-wide economy.'
Although here and there he speaks of wars， this only occursincidentally.The idea of a perpetual state of peace forms thefoundation of all his arguments.Moreover， according to theexplicit remarks of his biographer， Dugald Stewart， hisinvestigations from the commencement are based upon the principlethat 'most of the State regulations for the promotion of publicprosperity are unnecessary， and a nation in order to be transformedfrom the lowest state of barbarism into a state of the highestpossible prosperity needs nothing but bearable taxation， fairadministration of justice， and peace.' Adam Smith naturallyunderstood under the word 'peace' the 'perpetual universal peace'
of the Abb？St.Pierre.
J.B.Say openly demands that we should imagine the existenceof a universal republic in order to comprehend the idea of generalfree trade.This writer， whose efforts were mainly restricted tothe formation of a system out of the materials which Adam Smith hadbrought to light， says explicitly in the sixth volume (p.288) ofhis 'Economie politique pratique'.'We may take into ourconsideration the economical interests of the family with thefather at its head； the principles and observations referringthereto will constitute private economy.Those principles， however，which have reference to the interests of whole nations， whether inthemselves or in relation to other nations， form public economy(l'閏onomie publique).Political economy， lastly， relates to theinterests of all nations， to human society in general.'
It must be remarked here， that in the first place Sayrecognises the existence of a national economy or politicaleconomy， under the name '閏onomie publique，' but that he nowheretreats of the latter in his works； secondly， that he attributes thename political economy to a doctrine which is evidently ofcosmopolitical nature； and that in this doctrine he invariablymerely speaks of an economy which has for its sole object theinterests of the whole human society， without regard to theseparate interests of distinct nations.
This substitution of terms might be passed over if Say， afterhaving explained what he calls political economy (which， however，is nothing else but cosmopolitical or world-wide economy， oreconomy of the whole human race)， had acquainted us with theprinciples of the doctrine which he calls '閏onomie publique，'
which however is， properly speaking， nothing else but the economyof given nations， or true political economy.
In defining and developing this doctrine he could scarcelyforbear to proceed from the idea and the nature of the nation， andto show what material modifications the 'economy of the whole humanrace' must undergo by the fact that at present that race is stillseparated into distinct nationalities each held together by commonpowers and interests， and distinct from other societies of the samekind which in the exercise of their natural liberty are opposed toone another.However， by giving his cosmopolitical economy the namepolitical， he dispenses with this explanation， effects by means ofa transposition of terms also a transposition of meaning， andthereby masks a series of the gravest theoretical errors.
All later writers have participated in this error.Sismondialso calls political economy explicitly 'La science qui se chargedu bonheur de l'esp鑓e humaine.' Adam Smith and his followers teachus from this mainly nothing more than what Quesnay and hisfollowers had taught us already， for the article of the 'RevueM閠hodique' treating of the physiocratic school states， in almostthe same words： 'The well-being of the individual is dependentaltogether on the well-being of the whole human race.'