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Summary Political Economy COMPLETE Notes - GRADE: 8,4

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Course
Foundations of Political Economy

Institution
Universiteit Leiden (UL)

This is the complete summary of the Foundations of Political Economy Course by London - Reading, Lecture Notes + Additional Comments. The reading notes are thorough, but still concise and to the point. 175 pages in total. My final grade was a 8,4; so, studying with this should bring you far! Please...

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foundations of political economy
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Universiteit Leiden (UL)
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International Studies
Course
Foundations of Political Economy

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BAIS: Foundations of Political Economy

Foundations of Political Economy
International Studies - 2021/2022 - Dr. J.D. London

Foundations of Political Economy 1

Lecture 1: What is Political Economy? 11
Readings 11
Menz, Georg: A Genealogy of the Field from Adam Smith to the Mid-Twentieth
Century 11
Bandelj, N. And Sowers, E.: What is the Economy? 12
Stilwell, F.: The Personal is Political Economic 13
Lecture 1 Notes: What is Political Economy? 16
Why do we need this course? 16
Week 1 - Intended Learning Outcomes 16
Economics is… 16
How can we understand „economies“? 17
What occurs in an economy, what is it for? 17
What happens in economies? 17
Economies are configurations of 18
Different Forms of Economy and How they Vary 18
Forms of Economy 18
Dimension of Variation 18
What is Political Economy? 19
Bernstein‘s four questions (When thinking about Political Economy) 19
Question about economies 19
The value and limitations of economic perspectives 19
From Economics to Social Political Economy 19
Political economy versus the disciplines 19
How political economy differs 20
A plurality of perspectives 20
Distinctive elements of political economy 20
What does political economy address? 20
Political economy is personal 20

Lecture 2: Understanding Capitalism 22
Readings 22

1

, BAIS: Foundations of Political Economy

Stilwell, Economic Systems 22
Economic Fundamentals 22
Stilwell, Capitalism 24
Streek, How to Study Contemporary Capitalism? 26
Magdoff and Foster, The Growth Imperative of Capitalism 27
Lecture 2 Notes: Understanding Capitalism 29
Overview 29
What is an Economy? 29
Economies and Economic aspects of live 29
Questions about Economies 29
Bernstein’s four questions can be asked about any economy 30
What is Capitalism? 30
Markets, Market Economies, Capitalism 30
Understanding Capitalism 30
Defining Capitalism 30
Essential features of Capitalism 31
Stilwell on Capitalism 31
Features of Capitalism 31
“Capitalism does not care”... up to a point 32
How to study Capitalism? 32
Streeck: How to study capitalism? 32
Core insights of political economy 32
Capitalism across time and place 33
Assessing Capitalism’s Performance? 33
Evaluating an economy’s performance 33
Proponents of Capitalism 33
Criticism of Capitalism 33
Capitalism and the Environment (refers to Foster) 34
Capitalism and Corona 34
So, what is capitalism? 34
What is Socialism? 34

Lecture 3: Theorizing Political Economy 35
Readings: 35
Menz: The Trajectory of CPE as a Discipline 35
Classical Liberalism 35
Mercantilism 35
Marxism 37
Max Weber 37

2

, BAIS: Foundations of Political Economy

Neoclassical Economics 39
Stilwell, A Level Playing Field for Economic Ideas 40
Notes Lecture 3: Theorizing Political Economy 42
Foundations of Political Economy so far 42
Economies are configurations of 42
Capitalism as distinctive form of economy 42
Theoretical Traditions in Political Economy 42
Intended learning outcomes 42
Theoretical Traditions as Paradigmatic Traditions of Explanation 43
Lines of Questioning in Political Economy 43
Theoretical Traditions in Political Economy 43
Thematic focuses 43
Intellectual Dynamism: Traditions of Trial 43
Foundational Ideas as Articles of Faith 43
Seeing the same world differently (⇒ near religious quality) 43
Different Assumptions, Different Motive Forces 44
Different Theories and their advocates 44
Classical and 20th Century Political Economy 45
Contemporary Relevance of Political Economical Traditions 46
Varieties and Relevance 46
Political Economy beyond the disciplines 46

Lecture 4 46
Readings 46
North, Institutional Change and Economic Performance 47
Bandelj and Sowers, Central Institutions of Capitalism 49
Chang, Individuals as Heroes and Heroines 51
Lecture 4 Notes: Actors, Institutions and Organizations 54
Foundations of Political Economy so far 54
Overview: Actors, Institutions and Organizations (AIOs) 54
Intended Learning Outcomes 54
Economic Actors and Social Embeddedness 54
Understanding Economic Action 54
Who are the economic actors? 55
Neoclassical Economics’ Methodological Approach (Rodrik 2007) 55
“Rational action” is bounded, ≠ to self interest 55
Homo Economicus is at best misleading 55
Homo Economicus and Zoon Politikon 56
Economic Action is always socially embedded 56

3

, BAIS: Foundations of Political Economy

Institutions 56
Institutions defined (North) 56
Formal institutions 56
Informal Institutions, Practices, Symbols 57
Formal and Informal Institutions are Everywhere 57
Formal institutions exist at different scales 57
Institutions: A more detailed definition 57
Institutions and political economy - “institutions do not drop from the sky” 58
Organizations 58
Institutions vs organizations 58
Why do organizations exist, why “heroes?” 58
Three varieties of organizations 58
Capitalist, market economies decentralized, in principle 58
Corporate Governance Defined 59
Do states and institutions determine growth? 59

Lecture 5: Ideas, Interests and the State 60
Readings 60
Bandelj and Sowers: What is the State? -> state economy dualism 60
Hayek, The Market Order and Catallaxy -> origins of the market economy and state
(67-70; 109-111) 64
Polanyi, Our obsolete Market Mentality -> origins of the market economy and state
65
Chang, Ch. 11: The role of the State 67
Lecture 5 Notes: Ideas, Interest and the State 69
Foundations of Political Economy so far 69
Ideas, Interests, and the State 69
Essential questions 69
Intended Learning Outcomes 69
Ideas and Interests 69
Keynes, Hayek, Polanyi 69
Critical Political Economy and Institutions 70
Interests and the battle of ideas 70
Video: Overton Window 70
Perspectives on Interests in Capitalism 71
Defining the Political Economy of Interests? 71
In whose interests does the state rule? 71
Who wins battles of ideas and why? 71
Contending Perspectives on State and Economy 72

4

, BAIS: Foundations of Political Economy

Divergent perspectives on the state 72
Saying no to State - Economy Dualism 72
Rejecting False Dichotomies 72
Conceptualizing State-Economy Relations 72
Defining the State 72
The state and its social Environment 73
Political systems and economic systems 73
State forms, Authority and Economy 73
Variable processes of the state 74
Dimensions of state-economy relations 74
State functions 74
Ways of Analyzing the State and Economy 74
State Decisions as Dependent/Independent Variable 75
Why study the state not only markets, firms? 76
Key points on Ideas, Interests, and the State 76

Lecture 6: Growth and Productivity / Welfare, Poverty and Precarity 77
Readings 77
Chang, Ch. 6 GDP 77
Chang, Ch. 7: Economic Development 78
London, Welfare, Inequality and Marketization 79
Lecture 6 Notes: Growth and Productivity / Welfare, Poverty and Precarity 85
FoPE so far 85
Growth and Productivity, Welfare, Poverty, and Precarity 85
Intended Learning Outcomes 85
Performance: Ways of Thinking about Economic Performance 85
Economic Growth 86
Definition of Economic Growth 86
Video: The Rise and Fall of GDP 86
Why the emphasis on growth? 86
GDP 86
Capitalism’s growth addiction 87
Productivity 87
Definition Productivity 87
Increasing output and increasing productivity 87
Why Productivity matters 87
Examples of productivity growth 87
Some elements of productivity 88
Strategies for boosting productivity 88

5

, BAIS: Foundations of Political Economy

What efficiency is and is not 88
Why growth and productivity are so important 88
Welfare, Poverty, and Precarity 89
Definitions 89
Welfare 89
Subjective and Objective Aspects of Welfare 89
What is needed for Welfare? 89
How are needs satisfied? 89
What is needed to function? 89
Ideally, where is welfare created, allocated? 90
Capabilities 90
Elements of Capabilities 90
Measuring Welfare Outcomes 90
Moral Dimensions 90
Poverty 91
Determinants of Poverty 91

Lecture 7: Social Inequality and Capitalism 92
Readings 92
Chang, Ch. 9: Inequality, Poverty 92
Chang, Ch. 10: Work and Unemployment 94
Wright, From Grand Paradigm Battles to Pragmatic Realism: Towards an Integrated
Class Analysis 95
Notes: Lecture 7, Social Inequality and Capitalism 100
Foundations of Political Economy so far… 100
Weeks 7-12 100
Essential questions 100
Social inequality in capitalism 100
Intended Learning Outcomes 100
How SARS2 Deepens Inequality/Spread 101
Social Inequalities 101
Inequality is a fundamental feature of social life 101
What are Social inequalities? 101
Social Mobility 101
Questions 101
Perils of Inequality 102
Sources of inequality 102
Philosophical considerations 102
How control over value producing resources shapes inequality 103

6

, BAIS: Foundations of Political Economy

Income and asset inequality 103
Competing Accounts of Social Inequality 103
Accounts of Sources of Inequality 103
1. Functional Theory of Inequality 104
Functional theory of inequality 104
Critics of functional theory 104
How to alter/adjust inequalities? 104
2. Market Explanations and Their Critics (Neoclassical Economics) 104
Sources of Inequality within Markets 104
Assumptions about inequality in economics 104
Piketty 105
3. Social Conflict Explanations 105
Social conflict perspectives 105
Durable, Categorical Inequalities 106
Gradational vs. relational inequality revisited 106
Class and Class Explanations 106
Alternate uses of the term ‘class’ 106
Individual attributes/conditions with respect to opportunities and choices 106
Class explanations 107
University Elements of Class Analysis 107
Elements of Marxist Class Analysis 107
Exploitation and class interests 107
Wright: Rank Ordering of Preferences of Two Classes for the Fate of the Shmoos
108
The Class Analysis of Inequality and Poverty 109
Four approaches to poverty 109

Lecture 8: Multidimensional Inequality & Opportunity - Life chances in capitalist
economies 110
Readings 110
Stilwell, F., Multidimensional Inequality 110
Janina Urban and Andrea Pürckhauer, "Feminist Economics" 111
Fraser, Crisis of Care? On the Social-Reproductive Contradictions of Contemporary
Capitalism 114
Notes Lecture 8: Multidimensional Inequality and Opportunity 119
Inequality is a fundamental feature of social life 120
Intended Learning Outcomes 120
Durable, Categorical Inequalities (metaphor: rubix cube) 120
Individual attributes/conditions with respect to opportunities and choices 121

7

, BAIS: Foundations of Political Economy

Examples of categorical inequality 121
Institutions and durable inequalities 121
Three divergent views of employment 121
Dimensions of Categorical Inequalities 122
Intersectionality 123
Why intersectionality? 123
Amenability to multiple perspectives 123
Conclusion 123

Lecture 9: Social Reproduction - How capitalism is sustained 124
Readings 125
Harkness, Susan, "Gender and economic inequality," 125
Hartley, Dean, "What is Social Policy", Chapters 1+9 127
Bilge, S., Hill, C., "Intersectionality" 129
Rottenberg, “Who’s a feminist?” 131
Notes Lecture 9: Social Reproduction - How Capitalism is sustained 131
Outline 133
What keeps capitalism moving, sustained? 133
Rethinking the economy 133
Production/Reproduction Dichotomy 133
I. Social Infrastructures of Capitalism 134
II. Reproduction (The Other Hidden Abodes) 134
The workforce must be constantly regenerated 134
In Capitalism domestic labor supports profits 134
Gendered (including Feminist) perspectives 135
Video: “What the f*ck is social reproduction?” 135
Women’s socioeconomic status at a glance 135
Women’s political rights 135
Women’s economic status 135
Women and the Production of value 135
“Backward” relations in global care chains 136
Who is a Feminist? 136
III. Social Policy and Welfare Regimes 136
Is social policy non-capitalist? 136
What is Social Policy? 136
Social Policy Sectors 137
Social Policies are institutional arrangements 137
Welfare Regimes introduced 137
Remaining three weeks 137

8

, BAIS: Foundations of Political Economy

Lecture 10: 138
Readings 138
Hall and Soskice, Varieties of Capitalism: The institutional foundations of
comparative advantage (p. 8-17) 138
Van der Zwan, “Making Sense of Financialization” (Tutorial Notes) 139
Tolentino, “The gig economy celebrates working yourself to death” 141
Notes Lecture 10: Analyzing Varieties of Capitalism 141
Outline 141
Learning Outcomes 142
Why do varieties of capitalism matter? 142
Varieties of Capitalism 142
Varieties of Capitalism 142
Understand Capitalist Variety: Three Dimensions 143
Why does productivity growth matter? 144
Value and limits of VOC approach 144
The contested role of ideas 144
Varieties of Financialization 144
The Case of the US 144
Markets and Firms 144
Stakeholder vs Shareholder 145
Corporate Governance 145
SKIPPID: Hirschman, Finance, Corporate Governance 145
Firm/Financial market relations 145
Politics of finance 145
Finance and Industrial Relations 146
World Scale Financialization 146
Increased system risk 146
Financialization of Social Life 146
Varieties of Welfare Regimes 147
Welfare Regimes Analysis 147
Institutional of responsibility matrix 147
Assumptions of Welfare Regimes Analysis 147
“Three worlds of welfare capitalism” 147
Taxonomy of Welfare Regimes 148
Three Features of Esping-Anderson’s work 148
Critics of Welfare Regime Analysis 149
Regimes of capital accumulation and welfare 149
VOC and Welfare Regimes 149

9

, BAIS: Foundations of Political Economy

Lecture 11: Questioning the Political Economy of Development 150
Readings 150
Frank, The Development of Underdevelopment 150
Rodrik, One economics, many recipes: globalization, institutions, and economic
growth 152
Bandelj and Sowers, Ch. 6: Development 153
Lecture 11 Notes: Questioning the Political Economy of Development 158
Agenda 159
Understandings of “Development” 159
Low- and Middle Income Countries 159
Critics of Dominant Development Narrative 160
Expanding meanings of Development 160
The Political Economy of Growth 160
Contemporary Questions about Development? 160
Neoclassical Economics 161
The liberal view 161
Rodrik: The Primacy of Growth 161
Acemoglu and Robinson: Why Nations Fail 162
Not discussed in Lecture: Effective States (Evans, Huber, Stephens) 162
Examples: three comparisons 163
Critical Political Economy on Development 163

Lecture 12: 164
Readings: 164
Stilwell, W(h)iter Capitalism? Ch. 12 + 13 164
London, Foundations of Political Economy as tool for international studies 168
Notes Lecture 12: The Social and Ecological Bases of Capitalism and Its Futures 169
Agenda 169
Intended Learning Outcomes 169
Repetition/Recap: Varieties of Welfare Regimes 169
Welfare Regimes Analysis 169
The Welfare Mix and Welfare Regime Types 169
The welfare mix 169
Three “Worlds” of Welfare Capitalism 170
Assumptions of Welfare Regimes Analysis 170
Critics of Welfare Regime Analysis 171
“Second generation” welfare regimes analysis 171
The Foundations of Economies are social 171
Rethinking economics and the economy 171

10

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