These are the lecture notes of all lectures given in the course Foundations of Political Economy in the second semester of the first year of the BA international studies at Leiden University. With these notes I got a 7.7/10 for the course.
LEC 1: What is Political Economy
What is an economy?: work & production consumption distribution finance
What is economies?: discipline that studies how economy works
What is economic?: alternative use/allocation of scarce resources
What is a commodity?: goods sold on market
How PE differs?: multi-disciplinary approach. Rejection of artificial separation
What does PE address?:
● issues of vital importance for individuals/collectives
● economies and economic aspects of social life
● social relations within which they occur
● power/politics, culture, historical moments, places
Neoclassical economics: prevailing perspective enormously influential
,LEC 2: What is capitalism?
What appears in economy?: production distribution exchange consumption work
Economies are configurations of:
Actors production accumulation of value
institutions allocation, distribution of value
Organisational techniques welfare, inequality outcomes
Technologies implications for environment
Interests relations to politics
Forms of economy:
● hunter/gatherer → communal → slaveholder → feudal → market/capitalist →
socialist
Dimensions of variation
● divisions of labour
● property rights
● cooperation, competition
● power relations
● ultimate aims
● mechanisms of economic coordination
Economies are social/dynamic
● founded on social activity, including politics. Not understood independently of social
context
● Subject to continuity, instability and change. eg Rapid growth / recession / creative
destruction
● Shaped by relations among competing interests. eg feudalism / primitive
accumulation
Berstein’s 4 questions
● Who owns what?: property rights / origin / attributes
● Who does what?: division of labour
● Who gets what?: income/rent profits/loss
● What do they do with it?: consumption / oppotten
Market v. Capitalism.
● Market =
○ anywhere supply/demand meet
○ founded on voluntary exchange
○ amenity embedded in particular setting
● Capitalism =
○ natural form of economy
○ elite-driven project
○ efficiency only has meaning in regard to something
Defining Capitalism
● form of economy
● employers using privately owned capital goods
● hire wage labour to produce commodities
● purpose is profit
● role of state, ideology and tendency toward expansion
, Key features of capitalism
● central social relation is capital/labour that is asymmetric
○ those with tools and those without
● Decentralised mechanism of economic coordination (invisible hand)
● Markets for labour / capital / land / goods & services
● Competitive drive for profits & innovation → capital accumulation
Variable properties of capitalist economies
● qualities of supporting institutions
● presence/absence of ‘voice’ voluntary association rights
○ voting rights / labour or employers communities
● Universal dependence on unpaid labour
Capitalism refers to particular kind of society
● complex and dynamic networks of social relations
○ economic relations/systems
○ political relations/systems
○ cultural systems/production
Evaluating an economy’s performance
efficiency equity
profitability sustainability
freedom social goals
Proponents of capitalism:
● income & wealth generation
● dynamism
● massive expansion in economic output
● reduction in poverty
Capitalism & environment
● growth addicted: endless accumulation / pursuit of profit
● absent mechanism for self-regulation
● tends towards over-consumption
LEC 3: Theoretical traditions in PE
Theoretical traditions → key explanatory approaches
3 lines of questioning PE
● What do we observe?: observed patterns across time/place
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