Political Economy Definition

Structuralist ideas are rooted in Marxist analysis and focus on how the dominant economic structures of society affect (i.e., exploit) class interests and relations. Each of these perspectives is often applied to problems at several different levels of analysis that point to complex root causes of conflict traced to human nature , national interests , and the structure of the international system . For example, analysis of U.S. policy regarding migrants from Mexico must take into consideration patterns of trade and investment between the two countries and the domestic interests on both sides of the border. Similarly, domestic and international interests are linked by trade, finance, and other factors in the case of financial crises in developing countries such as Thailand and Argentina. The distinction between foreign and domestic becomes as uncertain as the distinction between economics and politics in a world where foreign economic crises affect domestic political and economic interests through trade and financial linkages or through changes in security arrangements or migrant flows.

Under communist regimes, resources are controlled and distributed by the government. But the term is probably best ascribed to the French writer and economist, Antoine de Montchrestien. He wrote a book called “Traité de l’économie politique” in 1615, in which he examined the need for production and wealth to be distributed on an entirely larger scale—not in the household as Aristotle suggested. Those who study political economy seek to understand how history, culture, and customs impact an economic system. Modern applications of the political economy study the works of more contemporary philosophers and economists, such as Karl Marx. The roots of political economy as we know it today go back to the 18th century.

Creating the European monetary union between diverse and unequal nation states is arguably one of the biggest social experiments in history. This book offers an explanation of how the euro experiment came about and was sustained despite a severe crisis, and provides a comparison with the monetary-financial history of the US. Analytic approaches to international political economy tend to vary with the problem being examined.

Britannica is the ultimate student resource for key school subjects like history, government, literature, and more. Adam Smith is generally considered the father of economics and the father of the https://www.wikipedia.org/. But the term is generally ascribed to French economist Antoine de Montchrestien, who wrote the book “Traité de l’économie politique,” which translates to the treaty of the political economy.

In the 1990s one focal point of debate was the North American Free Trade Agreement , which created a free-trade zone between the United States, Canada, and Mexico. Since it went into effect in 1994, the agreement has generated a good deal of controversy about whether it has created or eliminated jobs in the United States and Canada and about whether it has helped or harmed the environment, labour conditions, and local cultures in Mexico. About the same time the utilitarianism of Jeremy Bentham (1748–1832), James Mill (1773–1836), and Mill’s son John Stuart Mill (1806–73) fused together economic analysis with calls for the expansion of democracy. Political economy may draw upon sociology, economics, and political science to define how government, an economic system, and politics influence each other. The field of political economy is the study of how economic theories such as capitalism or communism play out in the real world.

Research by political economists is conducted in order to determine how public policy influences behavior, productivity, and trade. Much of their study helps them establish how money and power are distributed between people and different groups. Their study generally involves the examination of how public policy, the political situation, and political institutions impact a country’s economic standing and future through a sociological, political, and economic lens.

It offers a detailed analysis of the EU’s participation in all major trade and investment negotiations since the 1980s and EU-internal competence debates to identify the causes behind the EU’s growing role in this policy domain. Such themes were evident in the 1990s and the early 21st century when a number of politically and economically powerful multinational corporations were accused of https://www.sextonseattle.com/ exploiting women and children in unsanitary and unsafe working conditions in their factories in developing countries. These cases and others like them were seen by some structuralists as evidence of a “race to the bottom” in which, in order to attract investment by international businesses, many developing countries relaxed or eliminated worker-protection laws and environmental standards.

Tariff policies, for example, focuses on the impact of tariffs on the efficient use of scarce resources under a variety of different market environments, including perfect competition , monopoly , monopsony , and oligopoly . Different analytic frameworks examine the direct effects of tariffs as well as the effects on economic choices in related markets. Such a methodology is generally mathematical and is based on the assumption that an actor’s economic behaviour is rational and is aimed at maximizing benefits for himself.

Although political economy lacks a rigorous scientific method and an objective analytic framework, its broad perspective affords a deeper understanding of the many aspects of tariff policy that are not purely economic in nature. Ultimately, comparative analysts may ask why countries in certain areas of the world play a particularly large role in the international economy. Comparative political economists also have investigated why some developing countries in Southeast Asia were relatively successful at generating economic growth whereas most African countries were not.