Fulanito de Tal
6th February 2011, 17:32
This is an argument for studying politics and economy as one instead of separately. What do you think?
Political economy
There is, of course, as much debate about what exactly constitutes Political Economy as there is about the nature of Social Policy (Wright, 1990). Political Economy is variously understood today as an interdisciplinary approach which draws upon the methods and insights of the distinct disciplines of Economics and Politics (Caporaso and Levine, 1992), as ‘the study of the interplay of economics and politics’ (Frieden and Lake, 2000: 1) and, especially in its most popular current form of International Political Economy (or ‘Global Political Economy’), as an approach to academic enquiry which focuses upon the relationship between states and markets (Underhill, 2000; Palan, 2000). Yet according to Palan (2000: 2), (International) Political Economy’s distinct identity ‘is formed not through some shared core assumptions, but in [a] vague zonal terrain where one disciplinemesheswith another’.
As Gill and Law (1988: 3) point out, whilst the emergence of International Political Economy as ‘a self-conscious field of study’ took place in the 1970s, Political Economy has a long pedigree. The classical economists of Adam Smith and David Ricardo regarded themselves as Political Economists long before the modern discipline of ‘Economics’ was born. It was really the ‘neo-classical’ work of Alfred Marshall that gave birth to ‘Economics’ (Marshall, 1961). What separated Marshall from Smith and Ricardo was their theory of value. Marshall’s theory of ‘marginal utility’ emphasised the subjective desire of the consumer for a good, whereas Smith and Ricardo had developed the ‘labour theory of value’ (Hunt and Sherman, 1990; Smith, 1976; Ricardo, 1973).Whilst the details of value theory need not detain us here, what separated these two theories was an inherent concern with social class on the part of Smith and Ricardo, versus Marshall’s concern only with the proper functioning of the market. Whilst Adam Smith is regarded as ‘the father of modern Economics’, the context of rapid industrialisation and social change within which he and Ricardo wrote forced them to consider the relationships of classes to one another, as well as the role of government in facilitating the accumulation of wealth (‘the wealth of nations’ as Adam Smith’s famous book put it; Smith, 1976).
This concern with classes was, of course, developed explicitly by Marx, who put a revised version of the labour theory of value at the heart of his theory (Marx, 1976). Marx wrote at a time when the social sciences were not fully developed. He saw contemporary ‘Economics’ as a crude degeneration of the achievements of Smith and Ricardo,whilst Sociology would only develop later (partly as a response to Marxism itself ). Marx, therefore, saw himself as developing a comprehensive theory of society, and would have rejected the notion that the economic, political or other aspects of society could be studied in compartmentalised fashion. Both Marx and Engels thought the separation of the political and economic spheres that was characteristic of capitalist society was a relatively new historical phenomenon. This separation was both a key ideological pillar of capitalist society (in the sense that the apparent separation of economic power from political power made it more difficult to challenge) and necessary to its functioning (since capitalist domination rested not on hierarchy and status as in previous societies, but on private ownership and exchange). The state must therefore impose order in a
class-divided society, whilst simultaneously preserving its apparent neutrality (Engels, 1972).
The parallel development of modern Economics and of Marxism saw Economics
become an apparently neutral, technical subject (‘the dismal science’), whilst Political Economy was associated predominantly with Marxism. However, the publication of Keynes’ General Theory (1973) in the inter-war period provided the rationale for the postwar assumption of a central role for the state in managing the economy and maintaining high levels of production and employment, thus bringing analyses of economic policy to the fore. The attack on Keynesianism in the 1980s, particularly in Britain under Thatcher, also invigorated Political Economy analyses. Arguably, it became impossible not to take a Political Economy approach to analysis, since the state had become so entwined in the functioning of the economy (not least through the welfare state) that any attempt to reverse this was by definition political. Since then,many versions of ‘Political Economy’ have been developed, based upon combining insights from Economics and Political Science, but as Gilpin (2001: 26) points out, many of these ‘Political Economies’ represent a form of
‘economic imperialism’. Theories such as neoclassical institutionalism and public choice theory, for example, attempt to explain the behaviour of public bureaucracies by insisting that people act as rational self-interested individuals when taking political decisions, just as it is assumed they do when taking economic decisions. As Gilpin (2001: 27) puts it: ‘Economic imperialists assume that political and other forms of social behaviour can be reduced to economic motives and explained by the formal methods of economic science’.
These versions of ‘Political Economy’ have limited use because they refuse to consider the ways in which political power is both derived from and helps to shape the actual functioning of economies, other than to assume that otherwise efficiently functioning markets are the victims of self-serving bureaucrats. In contrast, a genuine Political Economy approach is based upon the conviction that if we wish to understand society, we cannot do it by separating politics and economics. As Gill (2001: 234) puts it:
First and foremost, [Political Economy] begins its enquiry by rejecting the dichotomisation of ‘politics’ and ‘economics’ and the false belief that these are separate spheres of behaviour each with discrete rules and attributes, to be understood through very different concepts and axioms. On the contrary, we know that ‘politics’ and ‘economics’ are inseparable, being but two aspects of social power combined in real historical social systems.
In other words, Political Economy approaches are based upon the realisation that the production and distribution of wealth cannot be separated from the operation of power.
Holden, C. (2005). Social policy and political economy: A tale of (at least) two disciplines. Social Policy & Society, 4(2), 173-181.
I know there is much missing. If you had the opportunity add to this, what would you add?
Political economy
There is, of course, as much debate about what exactly constitutes Political Economy as there is about the nature of Social Policy (Wright, 1990). Political Economy is variously understood today as an interdisciplinary approach which draws upon the methods and insights of the distinct disciplines of Economics and Politics (Caporaso and Levine, 1992), as ‘the study of the interplay of economics and politics’ (Frieden and Lake, 2000: 1) and, especially in its most popular current form of International Political Economy (or ‘Global Political Economy’), as an approach to academic enquiry which focuses upon the relationship between states and markets (Underhill, 2000; Palan, 2000). Yet according to Palan (2000: 2), (International) Political Economy’s distinct identity ‘is formed not through some shared core assumptions, but in [a] vague zonal terrain where one disciplinemesheswith another’.
As Gill and Law (1988: 3) point out, whilst the emergence of International Political Economy as ‘a self-conscious field of study’ took place in the 1970s, Political Economy has a long pedigree. The classical economists of Adam Smith and David Ricardo regarded themselves as Political Economists long before the modern discipline of ‘Economics’ was born. It was really the ‘neo-classical’ work of Alfred Marshall that gave birth to ‘Economics’ (Marshall, 1961). What separated Marshall from Smith and Ricardo was their theory of value. Marshall’s theory of ‘marginal utility’ emphasised the subjective desire of the consumer for a good, whereas Smith and Ricardo had developed the ‘labour theory of value’ (Hunt and Sherman, 1990; Smith, 1976; Ricardo, 1973).Whilst the details of value theory need not detain us here, what separated these two theories was an inherent concern with social class on the part of Smith and Ricardo, versus Marshall’s concern only with the proper functioning of the market. Whilst Adam Smith is regarded as ‘the father of modern Economics’, the context of rapid industrialisation and social change within which he and Ricardo wrote forced them to consider the relationships of classes to one another, as well as the role of government in facilitating the accumulation of wealth (‘the wealth of nations’ as Adam Smith’s famous book put it; Smith, 1976).
This concern with classes was, of course, developed explicitly by Marx, who put a revised version of the labour theory of value at the heart of his theory (Marx, 1976). Marx wrote at a time when the social sciences were not fully developed. He saw contemporary ‘Economics’ as a crude degeneration of the achievements of Smith and Ricardo,whilst Sociology would only develop later (partly as a response to Marxism itself ). Marx, therefore, saw himself as developing a comprehensive theory of society, and would have rejected the notion that the economic, political or other aspects of society could be studied in compartmentalised fashion. Both Marx and Engels thought the separation of the political and economic spheres that was characteristic of capitalist society was a relatively new historical phenomenon. This separation was both a key ideological pillar of capitalist society (in the sense that the apparent separation of economic power from political power made it more difficult to challenge) and necessary to its functioning (since capitalist domination rested not on hierarchy and status as in previous societies, but on private ownership and exchange). The state must therefore impose order in a
class-divided society, whilst simultaneously preserving its apparent neutrality (Engels, 1972).
The parallel development of modern Economics and of Marxism saw Economics
become an apparently neutral, technical subject (‘the dismal science’), whilst Political Economy was associated predominantly with Marxism. However, the publication of Keynes’ General Theory (1973) in the inter-war period provided the rationale for the postwar assumption of a central role for the state in managing the economy and maintaining high levels of production and employment, thus bringing analyses of economic policy to the fore. The attack on Keynesianism in the 1980s, particularly in Britain under Thatcher, also invigorated Political Economy analyses. Arguably, it became impossible not to take a Political Economy approach to analysis, since the state had become so entwined in the functioning of the economy (not least through the welfare state) that any attempt to reverse this was by definition political. Since then,many versions of ‘Political Economy’ have been developed, based upon combining insights from Economics and Political Science, but as Gilpin (2001: 26) points out, many of these ‘Political Economies’ represent a form of
‘economic imperialism’. Theories such as neoclassical institutionalism and public choice theory, for example, attempt to explain the behaviour of public bureaucracies by insisting that people act as rational self-interested individuals when taking political decisions, just as it is assumed they do when taking economic decisions. As Gilpin (2001: 27) puts it: ‘Economic imperialists assume that political and other forms of social behaviour can be reduced to economic motives and explained by the formal methods of economic science’.
These versions of ‘Political Economy’ have limited use because they refuse to consider the ways in which political power is both derived from and helps to shape the actual functioning of economies, other than to assume that otherwise efficiently functioning markets are the victims of self-serving bureaucrats. In contrast, a genuine Political Economy approach is based upon the conviction that if we wish to understand society, we cannot do it by separating politics and economics. As Gill (2001: 234) puts it:
First and foremost, [Political Economy] begins its enquiry by rejecting the dichotomisation of ‘politics’ and ‘economics’ and the false belief that these are separate spheres of behaviour each with discrete rules and attributes, to be understood through very different concepts and axioms. On the contrary, we know that ‘politics’ and ‘economics’ are inseparable, being but two aspects of social power combined in real historical social systems.
In other words, Political Economy approaches are based upon the realisation that the production and distribution of wealth cannot be separated from the operation of power.
Holden, C. (2005). Social policy and political economy: A tale of (at least) two disciplines. Social Policy & Society, 4(2), 173-181.
I know there is much missing. If you had the opportunity add to this, what would you add?