Caroline: I have been thinking a great deal of political economy since yesterday, my dear Mrs. B., but I feat not to much purpose: at least I am no farther advanced than to the discovery of a great confusion of ideas which prevails in my mind on the subject. This science seems to comprehend everything, and yet I own, that I am still at a loss to understand what it is. Cannot you give me a short explanation of it, that I may have some clear ideas to begin with?
Mrs. B.: I once heard a lady ask a philosopher to tell her in a few words what is meant by political economy. Madam, he replied, you understand perfectly what is meant by household economy, you need only extend your idea of the economy of a family to the whole of a people--of a nation, and you will have some comprehension of the nature of political economy.
Caroline: Considering that he was limited to a few words, do you not think that he acquitted himself extremely well? But as I have a little more patience than this lady, I hope you will indulge me with a more detailed explanation of this universal science.
Mrs. B.: Political economy treats of the formation, the distribution, and the consumption of wealth; it teaches us the causes which promote or prevent its increase, and their influences on the happiness or misery of society.
Jane Marcet, Conversations on Political Economy (1824) 1
For about a century after Adam Smith's death in 1790, when people spoke of political economy in Britain they usually meant one of three things. They used