In the late 19th century, the termeconomics gradually began to replace the termpolitical economy with the rise ofmathematical modeling coinciding with the publication of the influential textbookPrinciples of Economics byAlfred Marshall in 1890. Earlier,William Stanley Jevons, a proponent of mathematical methods applied to the subject, advocatedeconomics for brevity and with the hope of the term becoming "the recognised name of a science".[9][10] Citation measurement metrics fromGoogle Ngram Viewer indicate that use of the termeconomics began to overshadowpolitical economy around roughly 1910, becoming the preferred term for the discipline by 1920.[11] Today, the termeconomics usually refers to the narrow study of the economy absent other political and social considerations while the termpolitical economy represents a distinct and competing approach.
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 on economics, which comes from the Greekoikos (meaning "home") andnomos (meaning "law" or "order"). Political economy was thus meant to express the laws of production of wealth at the state level, quite like economics concerns putting home to order. The phraseéconomie politique (translated in English to "political economy") first appeared in France in 1615 with the well-known book byAntoine de Montchrétien,Traité de l'economie politique. Other contemporary scholars attribute the roots of this study to the 13th CenturyTunisian ArabHistorian andSociologist,Ibn Khaldun, for his work on making the distinction between "profit" and "sustenance", in modern political economy terms, surplus and that required for the reproduction of classes respectively. He also calls for the creation of a science to explain society and goes on to outline these ideas in his major work, theMuqaddimah. In Al-Muqaddimah Khaldun states, "Civilization and its well-being, as well as business prosperity, depend on productivity and people's efforts in all directions in their own interest and profit" – seen as a modern precursor toClassical Economic thought.
Leading on from this, the Frenchphysiocrats were the first major exponents of political economy,[12] although the intellectual responses[13] ofAdam Smith,John Stuart Mill,David Ricardo,Henry George andKarl Marx to the physiocrats generally receive much greater attention.[14] The world's first professorship in political economy was established in 1754 at theUniversity of Naples Federico II insouthern Italy. The Neapolitan philosopherAntonio Genovesi was the first tenured professor. In 1763,Joseph von Sonnenfels was appointed a Political Economy chair at theUniversity of Vienna, Austria.Thomas Malthus, in 1805, became England's first professor of political economy, at theEast India Company College, Haileybury,Hertfordshire. At present, political economy refers to different yet related approaches to studying economic and related behaviours, ranging from the combination of economics with other fields to the use of different, fundamental assumptions challenging earlier economic assumptions.
Social choice theory studies howutilities of individuals combine across society, also called thesocial welfare function, depending onpolitical structure.[19]Public choice theory is amicrofoundations theory closely intertwined with political economy.[20]Both approaches model voters, politicians and bureaucrats as behaving in mainly self-interested ways. Economists and political scientists often associate political economy with approaches usingrational-choice assumptions,[21] especially ingame theory[22] and in examining phenomena beyond economics' standard remit, such asgovernment failure and complex decision making in which context the term "positive political economy" is common.[23] Other "traditional" topics include analysis of such public policy issues aseconomic regulation,[24]monopoly,rent-seeking,market protection,[25] institutionalcorruption[26] anddistributional politics.[27] Empirical analysis includes the influence of elections on the choice of economic policy, determinants andforecasting models of electoral outcomes, thepolitical business cycles,[28]central-bank independence and the politics of excessive deficits.[29] An interesting example would be the publication in 1954 of the first manual of Political Economy in the Soviet Union, edited byLev Gatovsky, which mixed the classic theoretical approach of the time with the soviet political discourse.[30]
Other important landmarks in the development of political economy include:
New political economy which 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".[48] This approach informsAndrew Gamble'sThe Free Economy and the Strong State (Palgrave Macmillan, 1988), andColin Hay'sThe Political Economy of New Labour (Manchester University Press, 1999). It also informs much work published inNew Political Economy, an international journal founded by Sheffield University scholars in 1996.[49]
The use of a political economy approach by anthropologists, sociologists, and geographers used in reference to the regimes of politics oreconomic values that emerge primarily at the level of states or regional governance, but also within smaller social groups andsocial networks. Because these regimes influence and are influenced by the organization of bothsocial andeconomic 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 ofcapital. Such approaches expand onneo-Marxian scholarship related todevelopment andunderdevelopment postulated byAndré Gunder Frank andImmanuel 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.[52]
Political economy and law is a recent attempt within legal scholarship to engage explicitly with political economy literature. In the 1920s and 1930s,legal realists (e.g.Robert Hale) and intellectuals (e.g.John Commons) engaged themes related to political economy. In the second half of the 20th century, lawyers associated with the Chicago School incorporated certain intellectual traditions from economics. However, since the crisis in 2007 legal scholars especially related tointernational law, have turned to more explicitly engage with the debates, methodology and various themes within political economy texts.[53][54]
Thomas Piketty's approach and call to action which advocated for the re-introduction of political consideration and political science knowledge more generally into the discipline of economics as a way of improving the robustness of the discipline and remedying its shortcomings, which had become clear following the2008 financial crisis.[55]
In 2010, the only Department of Political Economy in the United Kingdom formally established atKing's College London. The rationale for this academic unit was that "the disciplines of Politics and Economics are inextricably linked", and that it was "not possible to properly understand political processes without exploring the economic context in which politics operates".[56]
In 2012, the Sheffield Political Economy Research Institute (SPERI) was founded atThe University of Sheffield by professors Tony Payne andColin Hay. It was created as a means of combining political and economic analyses of capitalism which were viewed by the founders to be insufficient as independent disciplines in explaining the2008 financial crisis.[57]
Because political economy is not a unified discipline, there are studies using the term that overlap in subject matter, but have radically different perspectives:[59]
Politics studies power relations and their relationship to achieving desired ends.
Philosophy rigorously assesses and studies a set of beliefs and their applicability to reality.
Economics studies the distribution of resources so that the material wants of a society are satisfied; enhance societal well-being.
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 fromKarl Marx.[citation needed] Marx's theories on the subject of political economy are contained in his bookDas 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 ofpseudo-Spanish expressions in the U.S. 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.[citation needed]
Archaeology attempts to reconstruct past political economies by examining the material evidence for administrative strategies to control and mobilize resources.[60] 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.
Geography studies political economy within the wider geographical studies of human-environment interactions wherein economic actions of humans transform the natural environment. Apart from these, attempts have been made to develop a geographical political economy that prioritises commodity production and "spatialities" of capitalism.
History documents change, often using it to argue political economy; some historical works take political economy as the narrative's frame.
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. Additionally and more recently, ecological theory has been used to examine economic systems as similar systems of interacting species (e.g., firms).[61]
Cultural studies examines social class, production, labor, race, gender and sex.
Communications examines the institutional aspects of media and telecommunication 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.
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