Political economy

• 1. Introduction

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  Political economy begins with a simple but unsettling question: can you really separate how a society makes money from how it governs itself? For centuries, the answer was obviously no. Long before economists existed as a professional class, thinkers from ancient Athens to medieval Tunis were wrestling with the same problem. How does wealth shape power? How does power shape wealth? And what happens when the two feed each other in ways that distort the rest of society?

  The field has an origin story that most textbooks skip. The phrase that gave it its name, économie politique, appeared in France in 1615 in a book by a soldier-economist named Antoine de Montchrétien. From that single publication, a tradition unfolded across several centuries, producing some of the most consequential arguments in intellectual history. Adam Smith warned that merchants would collude against the public. Karl Marx argued that capitalism and democracy were fundamentally at odds. Aristotle, writing millennia earlier, had said something strikingly similar about concentrated wealth destroying self-government.

  What follows is the story of how political economy rose, split apart, got renamed, and then came back. It is also the story of what was lost when economics tried to leave politics behind, and what scholars are still arguing about as a result.

• 2. A Greek Word, a French Phrase

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  The word economics traces back to the Greek oikonomikos, which referred to the management of a household or family estate. Political economy extended that household logic upward to the scale of the state, covering wealth, production, trade, taxation, and subsistence at the national level.

  The field's earliest named ancestor is a 14th-century Tunisian historian and sociologist named Ibn Khaldun, whom some contemporary scholars credit with the foundational distinction between "profit" and "sustenance." Khaldun called for the creation of a science to explain society and laid out his ideas in his major work, the Muqaddimah. He wrote there that "civilization and its well-being, as well as business prosperity, depend on productivity and people's efforts in all directions in their own interest and profit," a formulation that reads today like an early anticipation of classical economic thought.

  The formal coinage of the field as a named discipline came through Antoine de Montchrétien, whose 1615 book Traicté de l'oeconomie politique introduced the phrase économie politique in print. The French physiocrats, including François Quesnay, Richard Cantillon, and Anne-Robert-Jacques Turgot, then became the first major institutional exponents of the field, though the responses to them by Adam Smith, John Stuart Mill, David Ricardo, Henry George, and Karl Marx attracted far more attention in the centuries that followed.

• 3. The Marginalist Split

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  In The Wealth of Nations, Adam Smith described political economy as part of the "science of a statesman or legislator," its twin aims being to provide subsistence for the people and revenue for the state. That broad ambition held for roughly a century. Then a mathematician-economist named William Stanley Jevons proposed something different.

  In A General Mathematical Theory of Political Economy, Jevons developed the marginal utility theory of value, which sparked what came to be called the "marginal revolution." He also advocated dropping political economy as a name in favor of the shorter term economics, hoping it would become, as he put it, "the recognised name of a science." Alfred Marshall agreed. His Principles of Economics, published in 1890, argued that the field was "better described" as economics than by the "narrower term" political economy.

  The scholars Milonakis and Fine, writing in From Political Economy to Economics, argued that this transition involved what they called "desocialisation and dehistoricisation" and the separation of economics from the other social sciences at the beginning of the twentieth century. Michael Bernstein added that the marginalist-neoclassical turn allowed economists to break with the tradition of moral philosophy and construct what he called a "distinctly professional knowledge." Data from Google Ngram Viewer shows that use of the term economics began to overshadow political economy around 1910, and by 1920 had become the preferred name for the discipline.

• 4. The First Professors

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  Before the discipline had a fixed name, it needed chairs and classrooms. The world's first professorship in political economy was established in 1754 at the University of Naples Federico II in southern Italy. The Neapolitan philosopher Antonio Genovesi held the post as the first tenured professor.

  Nine years later, in 1763, Joseph von Sonnenfels was appointed to a political economy chair at the University of Vienna in Austria. England's turn came in 1805, when Thomas Malthus, already a recognized thinker on population and subsistence, became the country's first professor of political economy, at the East India Company College in Haileybury, Hertfordshire.

  An unusual data point from the Soviet Union shows how far the field's institutional reach eventually extended. In 1954, the first manual of Political Economy in the Soviet Union was published, edited by Lev Gatovsky. It mixed the classical theoretical approach of the era with Soviet political discourse, a reminder that the discipline was being pressed into service by governments with very different aims.

• 5. Power, Wealth, and Democracy

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  Aristotle argued in Politics that every regime tends to be captured by the interests of whichever class rules it. Oligarchy, in his analysis, becomes rule by the rich for their own interests. He warned that extreme inequality destroys self-government, and that when wealth becomes too concentrated, the rich come to dominate institutions and laws. His proposed safeguard was a large middle class, which he believed reduced domination by both wealthy oligarchs and desperate masses.

  Adam Smith raised a more specific concern in The Wealth of Nations. Merchants, he wrote, seldom meet together without ending in "a conspiracy against the public." He believed that while markets generate prosperity, economic elites tend toward monopoly and in doing so acquire political power alongside economic power.

  Karl Marx pushed the argument further. In The Communist Manifesto, he stated that "the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie." He held that economic power ultimately dominates political power under capitalism, and that capitalism and democracy are inherently at odds because a one-person-one-vote system is not necessarily able to address economic inequality or restrict the control of the bourgeoisie. Noam Chomsky carried a version of this concern into the contemporary period, arguing that modern democracies are heavily shaped by concentrated corporate and financial power, channeled especially through media ownership, lobbying, and campaign finance.

• 6. After 2008

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  The financial crisis of 2007 and 2008 prompted a visible return of political economy as a framework among scholars who felt that economics alone could not explain what had happened. Legal scholars in particular, especially in international law, increasingly engaged with political economy methodologies and debates in the years after the crisis.

  Thomas Piketty became an influential voice calling for the reintroduction of political science knowledge into economics as a way of improving the discipline's robustness and addressing the shortcomings the crisis had exposed. In 2010, the only Department of Political Economy in the United Kingdom was formally established at King's College London, with the stated rationale that politics and economics are "inextricably linked" and that it is "not possible to properly understand political processes without exploring the economic context in which politics operates."

  In 2012, professors Tony Payne and Colin Hay founded the Sheffield Political Economy Research Institute at the University of Sheffield, created specifically to combine political and economic analyses of capitalism, which the founders viewed as insufficient as independent disciplines for explaining the 2008 crisis. Five years later, in 2017, the Political Economy UK Group, abbreviated PolEconUK, was established as a research consortium whose member institutions include Oxford, Cambridge, King's College London, Warwick University, and the London School of Economics.