The three concepts introduced

The Wealth of Nations is said to have been the first systematic treatise upon the subject of economics, and students of that problem field should not be allowed to forget that it had its origin as a section in Adam Smith's lectures on jurisprudence. Its author referred to the subject as “the science of the legislator” (1976: 19, 428). To see the aptness of this characterization of “the science of political economy,” one need only review the circumstances of its application in the actual practice of its prominent practitioners since the days of Smith. In his most characteristic role as practitioner, the economist is a specialist advisor to legislators and citizens in a legislative frame of mind. The advising of business firms and other administrative organizations or agencies with well-defined ends to attain is an altogether different activity. In the role by which he is familiarly known in the history of the subject, he has practiced his profession as counselor to legislators in their deliberations upon how well or ill an economic system is working and upon how it might be modified to improve its performance.

It is in this factual setting, in which the economist will have assumed his characteristic role of legislative advisor, that we may identify the basic concepts–the categories of things and relations that the reasoning and talk are all about. Three of these classes of things may be noted immediately.