speri.comment: the political economy blog

Why Political Economy?

The global crisis is both economic and political. But economics and politics on their own won’t help us understand it

Professor Tony Payne, Professorial Fellow, SPERI

Tony Payne

Tony Payne

Why set up a new blog to host debate about issues of political economy?  Why establish a new university-based research institute – SPERI- focused upon the study of political economy?

The answer comes in two parts.  The first is that the global crisis, through which we are now living, with its varying national and regional ramifications throughout the world, including prominently the UK, is both economic and political in character.  The second is that the mainstream Western traditions of analysis in neither economics nor politics are capable of providing the explanations, insights and strategies that we all desperately need.

This double argument is the core reason why we need something called Political Economy as the intellectual fountain of new ideas and thinking for a new and troubled age.

So what’s wrong with the economics and the politics taught and researched in most leading Western universities these days? Why can’t these subjects, or disciplines, as they like to be termed, provide the tools we require to make sense of the financial crash, the recession and the resulting widespread confusion in so many countries about what kinds of growth model can be made to work sustainably in the future?

Economics has worked very hard over the past few decades to turn itself into a science that studies the choices made by rational actors in market environments under conditions of scarcity.  In so doing, it has substantially narrowed its remit, deploying ever more complex abstractions and mathematical tools to get its answers.  Modern economics is undeniably technically clever in much of what it does and it has acquired accordingly the cachet of being the most ‘scientific’ of the social sciences. Not surprisingly then, economists are in great demand to offer definitive advice to governments and other organisations. They tend to relish the challenge, displaying little uncertainty in the answers they provide.

But there is a big problem with this trend.  In creating this mock rational-actor world and then treating it with scientific reverence many contemporary economists, especially those trained in the neoclassical tradition, have given up on trying to comprehend the real world wherein the rest of us live and work.  Unfortunately, economists prefer far too often to forget that human beings are social and political animals, possessed of complicated and contradictory packages of motives that are not fully understood.

Politics as a field of study in the academy is very different.  It is true that it has within its ambit, especially in the US, a large group of researchers that aspire to emulate economics – to build up testable propositions that can be proved or disproved by reference to evidence.  It hardly needs to be said that this task is even harder to do on the basis of the rationality of political man.

In reaction to this pseudo-scientific thrust many other methodologies have flowered, ranging with huge variety across normative, institutional, behavioural, feminist and discourse perspectives. This list mainly describes the leading approaches to analysing domestic forms of politics and doesn’t touch on the much-touted claim that, notwithstanding the reality of globalisation, the ‘international’ is a field apart.

As with economics, this work is certainly not to be dismissed.  A lot of it is clever, insightful and deserves a wide readership.  The problem is that politics as a field of study has now spread itself too widely in search of methodological originality and pluralism.  There is no longer any core, no heartland of common knowledge and debate about power or democracy, the state or civil society, or indeed any of the major concepts in political analysis.  In the old saying, the field constitutes a pudding without a theme.

Where, then, have we got to in the overall argument?  We unquestionably still need economic and political analysis, more than ever perhaps, and we don’t have to worry about whether economics or politics predominates in determining events, because each does so in different situations at different times.  The key is always to think of these two dimensions of social life as comprehensively bound together, as constantly interacting, as constituting a political economy.

Here the really good news is that in seeking to chart a political economy of the current crisis we don’t have to start from scratch.  We can in fact go back to the future, because political economy, thankfully, does have a long and heroic intellectual history.  Before the modern social sciences began to divide a complex, interdependent world into discrete disciplines (like economics and politics) within which professional academics could build reputations, careers and departments, all that existed was the study of political economy. And, importantly, political economy was always grounded in a strong sense of moral philosophy.

Just think back to Adam Smith, Karl Marx and Max Weber, the great classical theorists of the ‘original transition’ to capitalism; remember how Joseph Schumpeter, John Maynard Keynes and Karl Polanyi kept political economy going as modern economics and politics began to take hold. And don’t forget the Latin American dependentistas, the world systems theorists, the French regulation school or the many contemporary followers of Antonio Gramsci.

This is political economy.  Its proponents saw the current global crisis coming more clearly than did most economists and political scientists. Today it offers the best basis on which to stand and think our way through to a new order.  We need even more political economy analysis in the future than we’ve had in the past and we need the key debates within political economy to be noticed in the corridors of private and public power. SPERI Comment aspires to be a place where these debates can be discovered and conducted.

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Categories: Blogging and social media, British growth crisis, Higher education, SPERI Comment | 5 comments

Articles and comments posted on this blog reflect the views of the author(s) and not the position of SPERI or the University of Sheffield.

Comments (5)

  1. The ideal motivating SPERI is a necessary and intellectually exciting initiative to examine and offer solutions to the economic and political crises in the wake of the 2008 financial crash. Not only did the crash undermine the generally accepted model of international financial governance, but it raised also significant questions about the linkages of political power to the economy. International finance during the crash proved itself to be a service that held an unacceptably large concentration of power. This was a concentration of power which was highly translatable into political clout; it allowed global finance to have a significant capacity for arbitrary control in the economy. The intellectual approach of political economy can, perhaps more than any other discipline, answer these questions.

    With a specific focus on the political economy of the United Kingdom, SPERI should be able to not just offer theoretical statements on good economic practice, but engage with the actual ideas present in contemporary political discourse. This should involve not just describing these debates, but normatively adjudicating on their value. This means holding the coalition government to account on its economic proposals, and acting as an incentive for the opposition to ‘up its game’ with regards to providing an alternative vision of governance to that which is presently on offer. SPERI should not see itself as an onlooker outside of the discussion in question but as an active participant in this very process. To be part of this democratic debate is absolutely essential as citizens have been left even more vulnerable to networks of potential exploitation in light of the recent recession. SPERI as an intellectual and a normative programme has the potential to go beyond what most academia can achieve and have real input in the real world application of its study.

  2. Two other fields which have tried to address the lack of integration of the social sciences are political ecology and ecological economics. I hope your conception of political economy is able to embrace the insights from these areas as they bring biophysical reality into the picture.

    Paul Baer
    School of Public Policy
    Georgia Tech

  3. It’s interesting that the article and above comments all seem to emphasise the dangers of false conceptual separations – of politics and economics, philosophy and political economy, ecology and the political. Of course we could add to this list the illusory separation of ‘the market’ from history/sociology/psychology etc. Undoubtedly a more pluralist political economy would enrich our analysis and serve to counteract some of the false dualisms characteristic of the contemporary mainstream debate on the crisis.

    However, each of the above positions is, as Adam says, motivated by an underlying moral critique. This implies that a new progressive political economy is also itself a form of political agency – it is concerned with making a decisive intervention upon which a new state-economy-citizen relationship can be built. In Gramscian terms, this might be termed a ‘counter-hegemonic’ project.

    In seeking to build this oppositional frame of reference, progressives should learn from the experience of the rise of Thatcherism in the late 1970s. Thatcherism was equally based on a disparate set of ideological and material imperatives but its success was rooted in its capacity to translate common concerns of the public into a unifying narrative. Thus, the message that the unions held ‘the country to ransom’ and that the state was ‘inefficient’ became popularised and politically effective. This capacity to translate disparate and conflicting accounts of the crisis into a accessible, popular and effective political movement should be the focus of the contemporary political left. So while I would welcome a return to pluralism and interdisciplinarity, I would also emphasise that an alternative to neoliberalism will become possible only when a coherent – and to a certain degree singular – interpretation of the crisis arises and is mobilised within the public sphere, upon which an equitable and sustainable political economy can be built.

    Scott Lavery

  4. A great manifesto for the study of political economy! Particularly clear and persuasive is the argument that political economy has to be at the heart of the study of all aspects of politics. Within my own sub-discipline, international relations, we have witnessed the same decentering of academic debate due to the rise of both hard rational choice methods – which rather curiously tend to avoid tricky questions of distribution – and of constructivist approaches focusing on norms and ideas. Returning to Laswell’s dictum that politics is about ‘who gets what, when and how’ holds the greatest promise for enabling the study of politics to produce relevant, critical insights into the world in which we live.

  5. Political economy has become more important than before. All politicians have to be educated an they have also to own a background knowledge about economy. The world economy is facing new chalenges which need qualified political economists.

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