Routledge
Encyclopedia of International Political Economy
R. J. BARRY JONES (Ed.)
London & New York : Routledge (Taylor & Francis
Group), 2001, 3 vols, 1818 pp.
What is
Political Economy and what are the differences of this classical field of study
from what we today call economics and politics? One possible way of defining
political economy is to use the traditional sense developed by mainstream
political economists of the classical era and define it as a body of fruitful
ideas for the guidance of economic policy-making by political authorities or
their opponents. However, one could hardly agree that political economists like
Marx (or Proudhon for that matter) simply aimed at developing policy
recommendations for ‘political authorities or their opponents’ when in fact
their fundamental aim was to radically criticise the existing socio-economic
system and show the need for its replacement with a completely different form of
socio-economic organisation. It is therefore obvious that political economy is a
much broader area of research than simply studying
the interrelationship between the ‘political ‘and the ‘economic’
in order to draw policy recommendations. Particularly so, when it could be
argued that this criterion may not adequately cover even some mainstream
classical political economists like Adam Smith, who were not simply concerned
with policy-making, as their clear aim was to justify ideologically the new
system that had just emerged out of feudalism and mercantilism.
At the
same time, there is no doubt that economics is a much more narrow field of study
than political economy. In fact, it was in
the last
quarter of the 19th
century
that important methodological
changes, introduced independently
by mainstream economists Jevons, Menger and Walras, started the marginalist
revolution, which represented a movement
in mainstream economic
analysis away from classical
political economy. This was in the context of an effort
to develop a ‘science’ of the economy, what we today call economics,
which was defined by
Alfred Marshall as a
science or toolbox
concerned “with the attainment and with the use of the material requisites of
well being”, a field of study clearly
distinguished from ‘politics’, i.e. the study of political relations and
structures
.
Although
most mainstream practitioners moved in the twentieth century away from political
economy into economics, still, the tradition of political economy, which has
been more accurately defined as
‘a science of economic organisation’ (p. 1252), not only did not disappear
but in fact showed a clear revival in the post second world war period.
Mainstream political economy continued existing in parallel with economics
throughout the liberal and statist phases of the modern era.,
in the form of classical liberal political economy and socialdemocratic
political economy respectively. The common characteristic of both mainstream
political economy, as well as of economics as such, was the attempt to
‘objectify’ and ‘scientify’ the analysis of the economy –a
characteristic that was shared in fact by every self-respecting field of
academic study in the modern era.
However,
as I showed elsewhere,
it was not only mainstream economists that attempted to develop a ‘science’
of the economy. On the radical side, both
Marx and Proudhon had no doubts about the ‘scientific’ character of their
own theories. This is
not of course surprising if one takes into account that, at the time they
developed their own liberatory projects, ‘scientism’, i.e. the excessive
belief in everything ‘scientific’, was at its highest point. In such a
climate, respectability about the seriousness of their views on an alternative
society could only be gained by draping them in ‘scientific’ colours, with
Marx attempting to provide a
universal interpretation of all human history and render the socialist
transformation of society historically necessary and Proudhon having no doubt at
all about the ‘scientific’ and ‘objective’ character of his theories.
Of course, both (albeit for different reasons) did not consider the political
economy of mainstream economists to be a true science. Furthermore,
Marx did not consider Proudhon’s economic analysis to be scientific and
vice versa. Marx, in particular, having dismissed Proudhon’s science, went on
to devote the entire fourth volume of Capital
to disprove mainstream political economy and even as recently as a couple of
decades ago structuralist Marxists declared that Marxism is not only a science
but a superior science, in fact, ‘the’ science of all sciences, given its
ability to synthesise the various special sciences: “Marxism therefore becomes
the general theory of Theoretical Practice and the key to and judge of what
counts as genuine knowledge.”
The
explanation for this common characteristic of mainstream and alternative
political economy is that both trends, following the
modernist tradition, attempted to rely on
objective theories and methods, (i.e., on procedures that are
supposedly valid, irrespective of our expectations, wishes, attitudes and ideas)
in order to justify the status quo and
the need for an alternative society respectively . The
argument in favour of this approach usually has taken the form that such theories
and methods reflect in fact `objective processes' at work in society or the
natural world. However, as I tried to show elsewhere,
a ‘science’ (mainstream or alternative)
of the economy or society in general is impossible . Few believe today, after the decisive
introduction in twentieth-century science of Heisenberg’s indeterminacy
principle, as well as of chaos theory (pp. 149-153), that it is still possible
to derive any 'objective' 'laws' or 'tendencies' of social change. Thus, if
cause and effect can be uncertain even in physics, the most exact of sciences,
and the reference to objective laws is disputed even with respect to the natural
world, it is obvious that postulating similar laws or tendencies for society is,
at least, absurd. Furthermore, the “scientification” of economic analysis is
nothing more than an attempt to “objectify”
an ideology, either this
ideology
aims at justifying the status quo of the market economy (as
mainstream economists do) or
alternatively its replacement by a
different form of socio-economic organisation (as opponents of the market
economy system do). This is particularly undesirable in case the supporters of
such a “scientific” ideology take over power. As the case of statist
socialism has shown, there is a definite link between the 'scientification' of
the liberatory project in the hands of Marxists-Leninists and the
subsequent bureaucratisation of socialist politics and the totalitarian
transformation of social organisation.
However,
in the present neoliberal phase of the modern era,
it seems that mainstream political economy, which is mainly an evolution
of the ideas that originated in the work of Hayek and von Mises, has split
between the old “scientific”
strand and a postmodern current mainly focused around ‘Post-rationalist
political-economy’. The former (as well as economics proper), still cultivates
the myth of a ‘scientific’ study of the economy whereas the latter
challenges the ‘scientific’ nature of political economy and the social
sciences in general. But if
modernist objectivism seems problematic and undesirable, this does not
mean that post-modernist
subjectivism is less problematic and more desirable. Postmodernist political
economy (see entries on postmodernism and post-rationalist political economy,
pp. 1246-1257), though a significant step forward compared to modernist
political economy/economics (e.g. rejection of ‘scientism’/objectivism in
the explanation of social phenomena, rejection of uni-discciplinary analysis),
may easily lead to general relativism and irrationalism, if not to complete
abandonment of radical politics. It
is characteristic for instance how supporters of post-rationalist International
Political Economy (IPE) see their difference with modernist political economy
(p.1253):
While
rationalist IPE is grounded in a unitary theory of the state, post-rationalist
IPE shifts the terrain by offering a theory of states or a theory of the
plurality of states. This changes the order of question from how order and
change come about in a ‘social formation’
or ‘world system’ to how order and change are constructed in a system
of fragmented political authority.
Clearly, post-rationalist IPE, under a pseudo-pluralistic banner,
rules out any universalist conception of the present economic system,
which of course is still based on the system of the market economy—
despite the parallel existence of ‘fragmented political authority’.
Still,
the dilemma of having to choose between
a modernist 'objectivist' approach and a post-modernist subjectivist
approach, in interpreting socio-economic phenomena, and
―even
more so― in
justifying the project for an alternative society, is a false one. Today, it is
possible to define a liberatory project for an
Inclusive
Democracy without recourse to controversial objective grounds, or to
post-modernist neo–conservatism. Thus, when we define the liberatory project
in terms of the demand for social and individual autonomy, as I did elsewhere,
we do so because we responsibly choose autonomy, as well as its expression in
democracy, and we explicitly rule out the possibility of establishing any
`objective' laws, processes or tendencies which, inevitably, or 'rationally',
lead to the fulfilment of the autonomy project. The Inclusive Democracy entry in
this Encyclopedia (pp 732-740) provides a concise and conceptually comprehensive
introduction to the conception of a new liberatory project, which has not been
derived on the basis of some natural or social ‘laws’ of evolution but as a
project
which is based on a synthesis of two major historical traditions
(classical democratic and socialist) that also encompasses radical green,
feminist and liberation movements in the South.
It
is therefore possible to develop a rigorous analysis of the economy and society
in general, like the one proposed by the Inclusive Democracy project,
which, though not claiming that it is grounded on some ‘laws’ of
natural or social evolution, is still based on a rational analysis (i.e. the use
of reason and sense-data) to derive
a definable body of principles to assess social and political changes. However,
such a body of principles could only be based on an axiomatic choice: whether we
take for granted the present system of the market economy and its political
complement, representative ‘democracy’, or whether instead we assume that
this system is by definition (as it cannot secure the equal distribution of
economic and political power) rejectable. It is on the basis of this fundamental
choice that practitioners in the field were explicitly (or more often
implicitly) making, one can classify them as belonging to either one of the two
major traditions, i.e.: mainstream political economy or radical political
economy. In other words, the fundamental point of difference between them is not
alternative policy recommendations but alternative world views on the economic
system itself. Mainstream economists/political economists
―which include
classical political economists like Adam Smith, John Stuart Mill and David
Ricardo but also modern ones like
John Maynard Keynes and the post-war generation of economists-- take the
existing system of capitalism or market economy
for granted. On the other hand, radical political economists --which
similarly include classical political economists like Karl Marx but also Pierre
J. Proudhon and others in the libertarian tradition, as well as the new radical
economists of the post-war period (world-system theorists, libertarian
socialists, libertarians of the democratic tradition —to which the Inclusive
Democracy project belongs― radical ecologists and others) challenge the system
itself and its ability to meet the needs of all people rather than over-covering
the needs of a few and under-covering the needs of the majority of the world
population, as the market economy system does. An intermediate position is held
by Karl Polanyi, who, although not taking the system of the market economy for
granted, ends up with the socialdemocratic conclusion
that society —through the state— can effectively control the market
economy —a justifiable hypothesis at the time (1940s).
Although
the Routledge Encyclopedia does not clearly distinguish between
these two main traditions of political economy, still, it is a
comprehensive survey of political economy, with particular reference to
the international domain —especially useful in the present globalised economy― covering almost all major theoretical issues and analytical approaches within
the field. The set also provides detailed discussions of the contributions of
key political economists
and
surveys a wide range of empirical conditions and developments within the global
political economy including its major institutions. Thus, theoretical entries
range from alienation and casino capitalism to fiscal crisis, geo-politics,
neo-realism, tariffs, Fordism,
inflation, liberation theology, monetarism, NATO and zero-sum games. The list of
entries makes obvious the interdisciplinary nature of the project. The very fact
that over 350 contributors spread in more than 30 countries and including
academics from the major universities
of the world, took part in this
project, is a clear indication of the serious effort that was made to offer an
up to date survey of all major developments in political economy. Finally, the
way that the material is organised, including over 1200 entries in 3 volumes
presented alphabetically with cross-references, a comprehensive index and
suggestions for further reading, makes it a particularly useful tool. Not only
for the connoisseur but even for the average reader who wishes to be
authoritatively informed on the major economic developments and schools of
economic thought.
Takis
Fotopoulos
P.J. Proudhon,
System of
Economical Contradictions: or, the Philosophy of Misery,
translated from the French (1846) by Benj. R. Tucker,
published and sold by Benj. R. Tucker, Boston, Mass. 1888 (Cambridge:
John Wilson and Son), vol. I, p
43.