I was asked in the last couple of days what a political economist is and why they are different from economists. This is a good question to which, I suspect, there is no definitive answer. I did however, offer an opinion.
An economist, I said, looks at the use of the world's resources by asking what data there is and what use they might make of that data.
A political economist, on the other hand, asks why that is the available data and what that implies about the relationships of power that determine the allocation of the world's resources.
That interpretation satisfied my enquirer and had the virtue of relative brevity. It also fitted very well into the context of the conversation we were having.
I suspect not everyone would agree with my suggestion though.
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Interesting.
Economics to me is also the study of human behaviour in commodity markets and around the supply of money. It is at its best when it is observing the present and not when it is predicting the future (or trying to).
Economics should therefore be called a ‘social science’ in my view. It is no where near a ‘natural science’ as those sciences concern themselves with the physics, chemistry, astronomy, geology because – all naturally occurring phenomena in the world in which we live and created long before we arrived on the scene.
Markets and money are created by people. The aspiration that economics can be like a natural science is well……….a joke in my view. There is a rationality in say the phenomena of gravity (it keeps us on the planet – the atmosphere too) but I cannot see much rationality in the working of markets. So why pretend to rationalise them? All you can do is explain what you see? And then what?
If economics were a proper science, then economists would have taken some of your hypotheses in your book ‘The Courageous State’ and tried them out – especially after 2008. But no – we continue to stutter a long with the old ways. Real scientist test hypotheses; fake scientists such as Economists tends not to.
The thing is, it is possible to be an economist but also think like a political economist without being aware of it.
That is because Economics is riven these days with political bias.
That is why need ‘pure’ political economists to point this out to the Economists! Like you my dear fellow!
The big issue for me has always been between what Begg calls ‘positive economics’ (objective explanations of the working of the economy) and ‘normative economics’ (offering recommendations based personal value judgements).
These labels are used to add weight to some bad ideas in economics and also undermine better ones.
And all they seem to do to me is aid the status quo whose subjective values are about ensuring that they maintain their position over others and continue to benefit most from markets and the processes that create money.
You might be interested in Behavioural Finance.
I’m interested in everything Marco.
Which can be a bit of burden at times.
I’m working through Richard Thalers’ ‘Misbehaving’ – his follow up to ‘Nudge’ – at the moment.
The addition of ‘human behaviour’ is important. When I studied economics in the early 80s we were offered a definition which may have been the Lionel Robbins one ( “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”, although I seem to remember a longer version). It was in the school of social sciences and I got a BA, not the BSc which older colleages seemed to have. However, a current colleague, a PhD scientist turned economist, is engaged in writing a major economics work from basics as a science.
Unfortunately the question of data availability leads quickly to speculation.
Interesting that you have to dig down to the 5-digit level to find “Banks” on the SIC07. Manufacturing by comparison has 24, 2-digit categories with industries as close as wood/wood products and paper/paper products being distinguished at that level.
Maybe I’m looking in the wrong places, but I note the ONS provides GVA data no further down than the 2-digit level.
You endorse the reason for asking the questions
Hiya,
John Michael Greer tackled this subject in his tongue in cheek way on his blog recently,
https://www.ecosophia.net/introduction-political-economy/
it does seem that as soon as you step outside of the status quo thought envelope that opinions from all quadrants of the spectrum are heading towards a new consensus,
mostly based on practical common sense not fanciful ideology,
that’s why I regularily visit here for a dose of sanity and avoid the weasel word world of the mainstream media,
best wishes to all in this new year,
Matt
With political economy the emphasis is on real world stuff and real world outcomes. Politics and history are part of it. I once told that to someone and they said ‘so its all gonna be about Government and Keynes and neo-liberalism, corporations, colonialism and all that. I said no there’s also currencies and exchange rates, trade, financial markets, economies of scale things like purchasing power parity and more besides.
“Political economy” is the original 18th century term for the subject as a whole. The word “economics” didn’t emerge until the late 19th century. Political economy has its technical side but it doesn’t engage in the stupidity of impersonating natural sciences. As such it is less likely to waste time on abstract theory, mathematical distraction or useless toy models.
The neutral science delusion first made an appearance in the late 19th century but didn’t really takeover economics until the science craze of the Cold War. Since then a separate sub-discipline of ‘political economy’ has emerged to distinguish itself from the formulaic stuff and return to the original, real world approach that we associate with the great economists of previous centuries – Hume, Adam Smith, Marx, Ricardo, JS Mill and so on.
Quite so. It’s very unfortunate that neoclassical economists claim Adam Smith as the father of their discipline when most of what they write about Smith is complete nonsense. Bentham, of whom Smith thought little, is the true father of the modern discipline.
With his indifference to distribution, most certainly yes
Chris Gregory, an economic anthropologist, explains the difference: Anthropology, Economics, and Political Economy. Marshall Sahlins, an economic anthropologist at the University of Chicago, explains why economists (meaning neoclassical economists), not least his past and current colleagues in the Law and Economics School at Chicago, have their heads up their arses.
Non-political economics starts from the point of every human being being a rational being who will naturally maximise his/her economic potential.
You can see why most people don’t take economics seriously
History doesn’t start from the point of our world being founded by beautiful purple unicorns.
Eriugenus
‘Non-political economics’ and rational self interest? Hmmm……..
I’ve always associated the mantra of economic self interest with neo-liberalism. People like von Hayek never even considered evidence of altruism as normal human behaviour for example. Omitting counter-factuals like that is a political act – it is done by choice, to model a world one wants to see from a particular perspective to help oil the cogs of particular objectives.
And yet it is the Left who are called dreamers!!!!
And behaviours like kindness and altruism can be politically and economically motivated too. But not according neo-liberalism. It seems that only money and commodities count. ‘Good will’ as a form of self interest? Pah!!
It once again shows that Steve Keen’s conclusion that neo-liberalism’s rampant philosophical reductionist view of the world means that it is not fit purpose in managing anything is correct.
In comparison, I’ve felt that Marxists analyse the observable self-interests of capital in order to drum up the self interests of Labour.
Since workers are the sole creators of wealth I don’t see how that can be criticism.
“So I totally agree with you about who is producing value — i.e. the worker.”
An excellent example of Political Economics fitting the data to the idea!
– Giving a worker tools does not create value then
– Automated factories produce no value
Think again
Peter
That makes no sense
No one argues there is no value here, but the value has gone to capital
But ask what capital is in that case because in a very real sense there is no such thing: what it is is the accumulated and as yet unused in the productive process net total of the labour expended in the process of its production
After all, there is no return to land
So in that case capital is accumulated labour
But of course in the process of accumulation we have got used to that value be in exporopriated over and above any appropriate return to capital (which is interest, in economic theory)
Capital is passive and inanimate. Capital doesn’t even make true investment decisions. Workers do that.
For those that may not know the key to this unusual conversation is here:
https://en.wikipedia.org/wiki/Transformation_problem
Well, its a nice easy place to start anyway
A Political Economist is one that chooses their facts to support their political views. An economist looks at the facts and tells us the political basis of the system they are looking at.
I am afraid to say that is only the opinion of neoliberal economists Peter
They do claim that
But there is not a single economists in the world who looks at facts objectively – because that is not possible
We all choose our facts – and we have to do so – there is too much evidence to choose from without selection bias ever being a factor
Economics as a discipline grew out of political philosophy in an attempt to more rationally explain human organisational behaviour which has been discussed since classical times. Unfortunately the economics bit has taken precedence over the more fluid political theories because it offered, falsely it turns out, a greater degree of certainty and mathematical precision for human behaviour. Economics can never be more than a useful secondary tool in the analysis of human society. People are social creatures and not ones that behave in mathematically precise ways. A political economist is one who recognises this fact and takes into account the messiness of human interaction and thought.
Carol
My thoughts on the Marxist analysis of capital were not meant as a criticism. As per usual in my usual rush to get thoughts out, I wrote badly and what I was really trying to do was say that Marxism does indeed observe and describe the economy as it presents itself. So I totally agree with you about who is producing value – i.e. the worker.
That’s why I think it is important not to refer simply to “the economy” but to “the political economy”
http://www.progressivepulse.org/economics/what-is-the-economy-for-further-thought-for-2018
Agreed
Maybe we should revert to Anthropology, with political economics a subsidiary discipline. Leaving out belief systems, social systems,informal networks of various types etc. is always going to give poor results