Key Debates in New Political Economy

Anthony Payne

• Publisher: Routledge
• Year: 2006
• ISBN:
  9781134153190
• Edition: 1
• Topic: Política y relaciones internacionales
• Subtopic: Política

A concise and highly informative overview of the major intellectual debates within the field of political economy over the last decade.

Each chapter provides a review of a key area written by a distinguished expert in the field. A comprehensive introduction locates these debates within the wider intellectual and political context which gave rise to them and provides some pointers to the future directions of political economy. Key areas covered include:

• models of capitalism
• globalization
• the environment
• gender
• territory and space
• regionalism
• development.

This is essential reading for all students of political economy from distinguished contributors including: Anthony Payne, Colin Crouch, James Meadowcroft, V. Spike Peterson, Saskia Sassen, Björn Hettne and Adrian Leftwich.

1 The genealogy of new political economy

Anthony Payne

Political economy is by general consent one of the oldest intellectual orientations in the history of the social sciences. So, what can sensibly be meant by seeking to introduce readers to ‘key debates’ within something called ‘new political economy’? This introductory chapter seeks to answer that question and, in so doing, to set in context the various tours d’horizon of key subfields of political economy contained in the remaining chapters of this collection. It does so by exploring the thinking that lay behind the foundation in 1996 of a new academic journal named New Political Economy and establishing the full genealogy of the intellectual project that the originators of this new publication sought to sustain, and indeed advance, by the foundation of such a journal.

The first issue opened with an editorial which declared, with what in retrospect seems extraordinary confidence, that ‘a new stage in the development of the world economic and political system has commenced, a new kind of world order’. Understanding this new world order was deemed to require ‘new modes of analysis and new theories, and a readiness to tear down intellectual barriers and bring together many approaches, methods and disciplines which for too long have been apart’. We boldly labelled the approach to analysis that we sought to promote a ‘new’ political economy and declared that the methodology we had in mind ‘rejects the old dichotomy between agency and structure, and states and markets, which fragmented classical political economy into separate disciplines’ and ‘seeks instead to build on those approaches in social science which have tried to develop an integrated analysis, by combining parsimonious theories which analyse agency in terms of rationality with contextual theories which analyse structures institutionally and historically’.¹ Such ambitions may have seemed somewhat overblown to many of those who read that first issue. Perhaps they still do. Yet they also give a sense that, in our minds at least, we were embarked upon a genuine intellectual adventure, that we were seeking to contribute to a rebuilding of the field of political economy and that, in that very spirit, we were asking for the support of scholars from all over the world who agreed with the general notion that a new political economy was emerging and needed to be explored in a novel way.

In setting out the project in that way in that opening editorial, the journal’s editors in effect revealed that they not only subscribed to a reading of the history of political economy that emphasised its seventeenth and eighteenth century origins, but that they wanted consciously to revive the most fundamental of the classical traits of the field and restore them to prominence again in the contemporary era. In its initial form classical political economy addressed the issue of running a large family household or estate, but, as trade and commerce grew and modern state structures began to be built, it came to focus centrally upon analysis of the economic and political organisation of the emergent nation-state. Early mercantilist theories were thus distinguished by their emphasis on the need for nation-states to accumulate wealth and their expectation that the national interest would always be different from the sum of individual interests. For their part, the French physiocrats argued that agricultural production was the true foundation of economic value, whilst Scottish Enlightenment thinkers preferred to stress the central place of manufacturing and commerce in the economic affairs of states. Classical political economy eventually came of age in 1776 with the publication of Adam Smith’s seminal Inquiry into the Nature and Causes of the Wealth of Nations. Smith famously showed how the development of a number of important market mechanisms could underpin the emergence of a more specialised division of labour in the economy and thereby bring about greater wealth and prosperity for all.

As Andrew Gamble argued in a separate publication, classical political economy always comprised three key discourses: ‘a practical discourse about policy, concerning the best means of regulating and promoting the creation of wealth, and maximizing revenue for the public household; a normative discourse about the ideal form which the relationship between the state and the economy should take; and a scientific discourse about the way in which a political economy conceived as a social system actually operates’.² In his estimation Smith was pivotal less because of the originality of his theoretical insights than because the fact that he managed ‘to combine all three discourses in an arresting new social vision’.³ Indeed, Smith had himself defined political economy in Wealth of Nations as ‘a branch of the science of a statesman or legislator’ whose objectives were ‘first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services’.⁴ In good part as a consequence of Smith’s influence, political economy continued to display this multi-faceted identity throughout its classical period, advancing further through the writings of David Ricardo and Thomas Malthus and climaxing with the publication in 1848 of John Stuart Mill’s Principles of Political Economy.

At this point Marx enters into the genealogy of new political economy in a crucial way. It was Marx, in fact, who identified ‘classical political economy’ as his main intellectual target and, in so doing, coined the term. His original project had been to use his version of Hegelian logic to write a multi-volume critique of the categories of analysis and operating principles underpinning Mill’s great work. What was eventually published from 1867 onwards as the first three volumes of Capital only partially realised this ambition: the anticipated volumes on the state, on international trade and on the world market never appeared in fully-fledged form. In his efforts to set out the laws of motion of capitalism and the consequent political implications of such a system Marx manifestly confronted all of the discourses of classical political economy – the practical, the normative and the scientific – and there can be no doubt that he assembled over his lifetime a hugely influential new view of political economy that has not only spread all over the world but has given rise to many of the concepts that continue to sit at the centre of social analysis. But at the same time it is very important to note that, for all of his genuine radicalism of thought, Marx did not break from the classical sense of what political economy was, and should be, about. In Gamble’s words again, he ‘did not dispute the basic conceptualisation of the field’.⁵

Nevertheless, as Michael Krätke and Geoffrey Underhill have recently noted in their brief account of the history of the tradition of political economy, Marx did represent an important turning point. As they put it, ‘his revolutionary critique stimulated many to intensify the search for “pure science” removed from the complexities of history and socio-political interaction, generating “Economics” as opposed to the older and discredited term, “Political Economy” ’.⁶ Feeding off the same core principles that had underpinned Jeremy Bentham’s ‘utilitarian calculus’ in moral philosophy, the so-called ‘marginalist revolution’ created over the course of the second half of the nineteenth century a new paradigm in economic analysis wherein increasingly abstract, indeed algebraic, calculations were made about the marginal utility of different economic choices in conditions of presumed scarcity. Stanley Jevons in Manchester, Carl Menger in Vienna and Léon Walras in Lausanne each contributed in their different ways to the birth of neoclassical economics and the concomitant ending of the presumed unity of economics and political economy.⁷ Economics thereafter took off in its preferred direction, leaving new disciplines like economic history and sociology, and later on political science and development studies, to pick up the historical and institutionalist modes of analysis that had hitherto always been the defining features of political economy.

How, then, was the torch of political economy kept alive in the context of the emerging hegemony of neoclassical economics? Perhaps the best way to understand the various intellectual developments of the first half of the twentieth century in this broad field is to conceive of two such torches that in the end burned brightly enough and for long enough to help spark the major revival of political economy within the academy that has taken place over the last thirty years or so. One represented a continuing institutionalist current within economics, generally functioning as a dissident movement, although enjoying passing phases of prominence as and when economic and political conditions gave it sustenance; the other grew from revolutionary beginnings into a genuinely radical tradition that proposed in turn theories of imperialism, theories of the systemic link between development and underdevelopment, and eventually theories of the ‘world system’ as a whole. Both bodies of thought were influenced by Marx, the former in a more subtle, sometimes hesitant, way, the latter overtly and self-consciously. Although it is striking, and disappointing, that neither strand of thinking spoke much, if at all, to the other at the time they were being developed, they did at least keep political economy alive over the course of several difficult decades. They now constitute two further bodies of thought, in addition to the classical tradition, on which contemporary ‘new political economy’ has been able to trespass and build.

The resilience of the first of these two ongoing traditions can be traced back to Joseph Schumpeter. Although his own practical politics were conservative, Schumpeter read Marx and took his analysis seriously. He was also brought up in the immediate aftermath of the Methodenstreit – the famous clash between Menger’s Austrian school which was promoting its version of neoclassical economics and the German historical school which still remained grounded in nationalist political economy – and deliberately sought in his own early thinking to bridge that fundamental chasm.⁸ Schumpeter’s cumulative theory of economic development has accurately been described as ‘a comprehensive attempt to formulate an integrated theoretical, statistical, institutional and historical analysis of the mechanism and contours of capitalist economic evolution’.⁹ In other words, he was as much economic historian and economic sociologist as economist pure and simple. Yet his initial programme of reconciliation and integration was notably unsuccessful, with economics continuing to grow in confidence as a separate discipline and the two sides of the old Methodenstreit becoming ever more entrenched in their respective camps during the early years of the twentieth century. Schumpeter himself moved to the United States in 1932 and addressed his concerns more and more to political questions, such as the role of the capitalist state. In fact, two of Schumpeter’s contemporaries ultimately had more influence than he ever did in shaping the discourse of political economy, especially during the 1930s and 1940s when unemployment, worldwide war and the emergence of increasingly interventionist states inevitably brought forward new thinking. In these years John Maynard Keynes offered a compelling way of conceptualising and managing capitalism that was neither communist nor fascist in inspiration, with the result that, for a long period after the end of the Second World War, his ideas underpinned economic policy making in the advanced industrial world. Karl Polanyi also demonstrated forcefully that economic relations are always embedded in complex social relations without which market economies cannot operate. He famously detected a ‘double movement’ in this era whereby ‘markets spread all over the face of the globe’ and yet at the same time ‘a network of measures and policies was integrated into powerful institutions designed to check the action of the market relative to labour, land and money’.¹⁰ The influence of both of these strands of analysis has been particularly long lasting, with Keynesians and Polanyians continuing to contribute actively to the political economy debate to this day.

The second tradition has been characterised here as radical in the sense that it has always maintained an explicit or implicit connection to Marxism and, as such, has always taken it for granted that the political and economic domains are intertwined and need to be considered together. It has been widely charted and is generally well understood. It reappeared most strikingly after Marx in Lenin’s depiction of imperialism as ‘the highest stage of capitalism’ in his well-known pamphlet published in 1916, itself a contribution to a passionate debate amongst Marxists of the time about the best way to theorise the new imperialism. It then ran on into the work of Paul Baran, André Gunder Frank and other dependency theorists in and out of Latin America, embraces the wide-ranging ‘world system’ theories of Immanuel Wallerstein and his followers, includes the French regulation school and feeds finally into the contemporary, highly fashionable embrace of Gramscian political economy in both cultural studies and international relations theory. The point about this tradition is that its contributions have often been ignored by the mainstream, not only in economics but also in other social science disciplines. It has been too easy perhaps for many to condemn this work as either potentially dangerous (in the context of the Cold War), or no longer relevant (in the context of the ending of the Cold War), or as applicable at best only to certain parts of the ‘developing world’. Radical political economy of this genre has thus long been part of the intellectual tool-kit of development studies, for example, but for most of the post-1945 era it was kept at the margins of political science and international relations analysis, only being allowed in occasionally as a third, somewhat alien, voice in the latter discipline’s so-called ‘great debates’ between realism and liberalism. However, from our perspective it constitutes a central part of the history of political economy, which again only needed to be recognised for what it was and reintegrated accordingly into the core of the subject.

In sum, as neoliberalism asserted itself across the Anglo-American world during the course of the 1980s, as the Berlin Wall was torn down and communism as ...

Table of contents

• Cover
• Half Title
• Full Title
• Copyright
• Contents
• List of contributors
• Preface
• List of abbreviations
• 1 The genealogy of new political economy
• 2 Models of capitalism
• 3 Reflections on some lessons learned from a decade of globalisation studies
• 4 Environmental political economy, technological transitions and the state
• 5 How (the meaning of) gender matters in political economy
• 6 When national territory is home to the global: old borders to novel borderings
• 7 Beyond the 'new' regionalism
• 8 Politics in command: development studies and the rediscovery of social science
• Index