Providing a definitive answer to this question is more or less impossible. But there are some opinions that
hold up fairly well.
A good way to understand Political Economy is to consider what it is not.
Leon Walras (1834-1910) authored a major two part study that was published in French in 1844-77: Elements d economie politique pure. In English this work appears as Elements of Pure Economics.
What was was Walras attempting to do with this book?
Walras sought to develop, in elaborate and brilliant detail, relying on sets of simultaneous equations - a depiction that an individual market clears through a process know as tatannement, that is, an automatic
adjustment of prices in response to excess demand and supply.
Walras models how it is that a market clearing price leads to an equilibrium of supply and demand. He took this notion a step further and proposed and demonstrated that there could exist a price vector that would lead to the clearing of all markets (general equilibrium).
Is there more to an economy than markets moving toward equilibrium? Do markets actually tend toward and achieve equilibrium? Does Walras's understanding of "pure" economics leave out other, important elements that contribute toward economic outcomes?
Political Economists are inclined to think differently and more broadly than General Equilibrium Theory suggests.
We could say that Leon Walras' contribution sought to take away other elements that likely play important roles in economic outcomes, and that Political Economists tend to inquire into a wider range of elements that affect economic outcomes, social reality, and what we also appreciate as the "human condition."
There is a touch of irony to consider. Walras held the Chair of Political Economy at University of Lausanne in Switzerland, for 20 years.
|
A French Physcian named Francois Quesnay (1694-1774) is often credited with the first, seminal contribution to Political Economy. In the 1750's Quesnay organized a group known as 'physiocrats.' Their school, Physiocracy, purported that wealth was generated from the soil. When a seed of wheat is planted, for example, the single seed produces a plant with a greater number of seeds than the original seed planted. To Quesnay, this is the creation of wealth.
Agriculturalists were considered a "productive" class. Quesnay is credited for his Tableau Economique (Economic Table). In this table he divides society into three classes: agriculturalists, landlords, and artisans. He considered the agriculturalists as the "productive" class. The landlords and artisans were considered "non productive." He sought to demonstrate how surplus was created in agriculture and then distributed between and among the three classes. Quesnay laid the foundations for Classical Political Economy. He introduced economic classes, he designated classes as "productive" and "unproductive." He was concerned with the production and the creation of "surplus" and the distribution of surplus. He was interested in how the system reproduced itself. This broad inquiry is characteristic of political economists.
Adam Smith (1723-1790) came into contact with Quesnay while visiting France in the 1760s. Smith's masterpiece, An Inquiry into the Nature and Causes of the Wealth of Nations (1776) advanced political economy, and introduced the importance of the "division of labor." However, Smith was known as a "moral philosopher." Following
in Smith's vein of inquiry, David Ricardo (1772-1823) authored, among other works, Principles of Political Economy and Taxation (1848). Ricardo refined Smith's concept of value into a "theory of value."
Karl Marx (1818-1883) studied philosophy, but he is best known for his contributions to political economy, especially his three volumes of Capital:
A Critique of Political Economy.
Marx's ideas flow in the tradition of Quesnay, and he builds on the contributions
of Smith and Ricardo. Marx challenged himself to explain the creation and appropriation of surplus in an industrial economy based on the 19th
century factory.
This takes us up to Walras. There is evidence that Walras -- with his
"pure" economics -- was attempting to take away the social, political, and historical features that had formed the works of the four great thinkers in Classical Political Economy: Quesnay, Smith, Ricardo, and Marx.
Generally, Political Economy in the tradition of the Classical Political Economists seeks a broad inquiry that includes many variables, but is concerned with production and distribution, as well as reproduction of economic systems. Pure Economics in the tradition of Walras tends to take the approach that markets allocate resources efficiently, especially when left free of regulation.
Is "power" a force to contend with in an economy?
Does "fear" play a role in how people are allocated in labor markets?
|
