Political economy

Political economy was the original term used for studying production and trade, and their relations with
law, custom, and government, as well as with the distribution of national income and wealth. Political
economy originated in moral philosophy. It was developed in the 18th century as the study of the
economies of states, or polities, hence the term political economy.

In the late 19th century, the term economics came to replace political economy, coinciding with the
publication of an influential textbook by Alfred Marshall in 1890.[1] Earlier, William Stanley Jevons, a
proponent of mathematical methods applied to the subject, advocated economics for brevity and with
the hope of the term becoming "the recognised name of a science."[2][3]

Today, political economy, where it is not used as a synonym for economics, may refer to very different
things, including Marxian analysis, applied public-choice approaches emanating from the Chicago school
and the Virginia school, or simply the advice given by economists to the government or public on
general economic policy or on specific proposals.[3] A rapidly growing mainstream literature from the
1970s has expanded beyond the model of economic policy in which planners maximize utility of a
representative individual toward examining how political forces affect the choice of economic policies,
especially as to distributional conflicts and political institutions.[4] It is available as an area of study in
certain colleges and universities.

Contents

1 Etymology
2 Current approaches
3 Related disciplines
4 See also
5 Notes
6 References
7 Journals
8 External links
Etymology

Originally, political economy meant the study of the conditions under which production or consumption
within limited parameters was organized in nation-states. In that way, political economy expanded the
emphasis of economics, which comes from the Greek oikos (meaning "home") and nomos (meaning
"law" or "order"); thus political economy was meant to express the laws of production of wealth at the
state level, just as economics was the ordering of the home. The phrase conomie politique (translated
in English as political economy) first appeared in France in 1615 with the well-known book by Antoine de
Montchrtien, Trait de leconomie politique. The French physiocrats, Adam Smith, David Ricardo, and
German philosopher and social theorist Karl Marx were some of the exponents of political economy. The
world's first professorship in political economy was established in 1754 at the University of Naples
Federico II, Italy (then capital city of the Kingdom of Naples); the Neapolitan philosopher Antonio
Genovesi was the first tenured professor; in 1763, Joseph von Sonnenfels was appointed a Political
Economy chair at the University of Vienna, Austria. In 1805, Thomas Malthus became England's first
professor of political economy, at the East India Company College, Haileybury, Hertfordshire. Glasgow
University, where Smith was Professor of Logic and of Moral Philosophy, changed the name of its
Department of Political Economy to the Department of Economics (ostensibly to avoid confusing
prospective undergraduates) in the academic year 199798, leaving the class of 1998 as the last to be
graduated with a Master of Arts (Scotland) in Political Economy.

In the United States, political economy first was taught at the College of William and Mary, where in
1784, Smith's The Wealth of Nations was a required textbook.[5]

Current approaches


Robert Keohane, international relations theorist
In its contemporary meaning, political economy refers to different, but related, approaches to studying
economic and related behaviours, ranging from the combination of economics with other fields to the
use of different, fundamental assumptions that challenge earlier economic assumptions:

Political economy most commonly refers to interdisciplinary studies drawing upon economics, sociology,
and political science in explaining how political institutions, the political environment, and the economic
systemcapitalist, socialist, or mixedinfluence each other.[6] The Journal of Economic Literature
classification codes associate political economy with three subareas: the role of government and/or
power relationships in resource allocation for each type of economic system,[7] international political
economy, which studies the economic impacts of international relations,[8] and economic models of
political processes.[9] The last area, derived from public choice theory and dating from the 1960s,
models voters, politicians, and bureaucrats as behaving in mainly self-interested ways, in contrast to a
view, ascribed to earlier economists, of government officials trying to maximize individual utilities from
some kind of social welfare function.[10] An early and continuing focus of that research program is what
came to be called constitutional political economy.[11]
Economists and political scientists often associate political economy with approaches using rational-
choice assumptions,[12] especially in game theory,[13] and in examining phenomena beyond
economics' standard remit, such as government failure and complex decision making in which context
the term "positive political economy" is common.[14] Other "traditional" topics include analysis of such
public policy issues as economic regulation,[15] monopoly, rent-seeking, market protection,[16]
institutional corruption,[17] and distributional politics.[18] Empirical analysis includes the influence of
elections on the choice of economic policy, determinants and forecasting models of electoral outcomes,
the political business cycles,[19] central-bank independence, and the politics of excessive deficits.[20]
A recent focus has been on modeling economic policy and political institutions as to interactions
between agents and economic and political institutions,[21] including the seeming discrepancy of
economic policy and economist's recommendations through the lens of transaction costs.[22] From the
mid-1990s, the field has expanded, in part aided by new cross-national data sets that allow tests of
hypotheses on comparative economic systems and institutions.[23] Topics have included the breakup of
nations,[24] the origins and rate of change of political institutions in relation to economic growth,[25]
development,[26] backwardness,[27] reform,[28] and transition economies,[29] the role of culture,
ethnicity, and gender in explaining economic outcomes,[4] macroeconomic policy,[30] the
environment,[31] fairness,[32] the relation of constitutions to economic policy, theoretical[33] and
empirical.[34]
New political economy may treat economic ideologies as the phenomenon to explain, per the traditions
of Marxian political economy. Thus, Charles S. Maier suggests that a political economy approach
"interrogates economic doctrines to disclose their sociological and political premises.... in sum, [it]
regards economic ideas and behavior not as frameworks for analysis, but as beliefs and actions that
must themselves be explained."[35] This approach informs Andrew Gamble's The Free Economy and the
Strong State (Palgrave Macmillan, 1988), and Colin Hay's The Political Economy of New Labour
(Manchester University Press, 1999). It also informs much work published in New Political Economy, an
international journal founded by Sheffield University scholars in 1996.[36]
International political economy (IPE) is an interdisciplinary field comprising approaches to the actions of
various actors. In the United States, these approaches are associated with the journal International
Organization, which in the 1970s became the leading journal of IPE under the editorship of Robert
Keohane, Peter J. Katzenstein, and Stephen Krasner. They are also associated with the journal The
Review of International Political Economy. There also is a more critical school of IPE, inspired by Karl
Polanyi's work; two major figures are Matthew Watson and Robert W. Cox.[37]
Anthropologists, sociologists, and geographers use political economy in referring to the regimes of
politics or economic values that emerge primarily at the level of states or regional governance, but also
within smaller social groups and social networks. Because these regimes influence and are influenced by
the organization of both social and economic capital, the analysis of dimensions lacking a standard
economic value (e.g., the political economy of language, of gender, or of religion) often draws on
concepts used in Marxian critiques of capital. Such approaches expand on neo-Marxian scholarship
related to development and underdevelopment postulated by Andr Gunder Frank and Immanuel
Wallerstein.
Historians have employed political economy to explore the ways in the past that persons and groups
with common economic interests have used politics to effect changes beneficial to their interests.[38]
Related disciplines

Because political economy is not a unified discipline, there are studies using the term that overlap in
subject matter, but have radically different perspectives:

Sociology studies the effects of persons' involvement in society as members of groups, and how that
changes their ability to function. Many sociologists start from a perspective of production-determining
relation from Karl Marx. Marx's theories on the subject of political economy are contained in his book
Das Kapital.
Anthropology studies political economy by investigating regimes of political and economic value that
condition tacit aspects of sociocultural practices (e.g., the pejorative use of pseudo-Spanish expressions
in the US entertainment media) by means of broader historical, political, and sociological processes.
Analyses of structural features of transnational processes focus on the interactions between the world
capitalist system and local cultures.
Archaeology attempts to reconstruct past political economies by examining the material evidence for
administrative strategies to control and mobilize resources.[39] This evidence may include architecture,
animal remains, evidence for craft workshops, evidence for feasting and ritual, evidence for the import
or export of prestige goods, or evidence for food storage.
Psychology is the fulcrum on which political economy exerts its force in studying decision making (not
only in prices), but as the field of study whose assumptions model political economy.
History documents change, often using it to argue political economy; some historical works take political
economy as the narrative's frame.
Human geography at times draws on theories of politico-economic processes. Typically under the
moniker of political ecology, political ecology has been used by geographers to understand human
systems and their relationship with the environment, broadly defined.[40]
Ecology deals with political economy, because human activity has the greatest effect upon the
environment, its central concern being the environment's suitability for human activity. The ecological
effects of economic activity spur research upon changing market economy incentives.
Cultural studies examines social class, production, labor, race, gender, and sex.
Communications examines the institutional aspects of media and telecommuncation systems. As the
area of study focusing on aspects of human communication, it pays particular attention to the
relationships between owners, labor, consumers, advertisers, structures of production, and the state,
and the power relationships embedded in these relationships.
Source: http://en.wikipedia.org/w/index.php?title=Political_economy&printable=yes