Political Economy

by

Gregory Hooks, Andrew Crookston

• LAST REVIEWED: 26 August 2013
• LAST MODIFIED: 26 August 2013
• DOI: 10.1093/obo/9780199756384-0103

Introduction

Arguably, political economy—the intersection of economics and politics—is the foundation of the modern social sciences and the focus of founding sociological theorists, most notably Max Weber, Karl Marx, and Friedrich Engels. Arguably, with his extended concern for the division of labor, even Emile Durkheim was profoundly concerned with political economy. Although this is not the case for economics and political science, the meaning of political economy has been fairly consistent in sociology. That is, the sociological examination of political economy has retained a focus on the intersection between the political and the economic. Theoretical emphases have shifted in the course of lively and extended debates over the state, markets, social class, culture, citizens, and globalization. Nevertheless, the central focus of political economy has persisted, as has its importance to sociological theory.

Issues of Definition

In one sense, the meaning of political economy is straightforward; it refers to the intersection of the political and the economic. Clark 1998 examines change and continuity in the meaning of the term. The classical contributors to economics routinely used the term, including David Ricardo and Adam Smith. Over the course of the 20th century, the meaning of the term has become muddied. In the late 19th and early 20th centuries, as the social science disciplines became institutionalized (often by sharpening the contrast among them), the term political economy became less ubiquitous and it came to mean different things across social science disciplines. In economics, the consolidation of neoclassical theory resulted in a focus on the rational action of individuals and a sharp conceptual divide between the political and the economic. Whereas maverick economists such as Pareto 1971 and Schumpeter 2008 (originally published in 1950) did refer to political economy (with meaning similar to the classical theorists), the neoclassical framework conceived of public policy interfering with a “natural” and pre-existing economy. When the term was used, it referred to policy advice that economists offered to government officials based on an analysis of the economy. Although the path has meandered, the meaning of political economy in sociology is largely consistent with the classical heritage. Sociologists interested in these topics draw on classical theorists and use the term political economy to refer to this intersection. See also Smelser and Swedberg 2005.

• Clark, Barry Stewart. 1998. Political economy: A comparative approach. 2d ed. Westport, CT: Praeger.

  With consideration of competing and complementary meanings and uses of the term, Clark provides an extended examination of the manner in which political economy has been defined and used. This examination considers both the origin of the term and changing meaning over time in both social science and historical disciplines.

• Pareto, Vilfredo. 1971. The manual of political economy. Edited by Ann S. Schwier and Alfred N. Page. Translated by Ann S. Schwier. New York: Kelley.

  Pareto expands on several of his notable economic theories, including his theory of equilibrium, by distinguishing between the stable and unstable sector. He also explicates what is known as the “Pareto Principle,” which uses econometric pyramids to account for economic stratification.

• Schumpeter, Joseph Alois. 2008. Capitalism, socialism, and democracy. New York: HarperCollins.

  Schumpeter considers the future of capitalism, socialism, and democracy. He predicts the collapse of capitalism, with socialism its likely replacement. This leaves Schumpeter pessimistic about the prospects for democracy because he believes it to derive from capitalism. Originally published in 1950.

• Smelser, Neil, and Richard Swedberg. 2005. Introducing economic sociology. In The handbook of economic sociology. 2d ed. Edited by Neil Smelser and Richard Swedberg, 3–25. Princeton, NJ: Princeton Univ. Press.

  In the course of defining economic sociology and discussing its revival, Smelser and Swedberg examine the divergence and convergence between economics and sociology. This overview includes a discussion of disciplinary institutionalization over time and history of prominent conceptual frameworks and research programs.