The Politics and Economics of Power

The Politics and Economics of Power

The Politics and Economics of Power

The Politics and Economics of Power

Synopsis

The contributors examine power relations in the firm and the marketplace and offer an economic perspective of political relations. The analysis of power relations is becoming increasingly important to economists in order to understand concepts such as the "contested nature" of market exchanges.

Excerpt

Trespassing the boundaries of politics and economics

Samuel Bowles, Maurizio Franzini, and Ugo Pagano

The traditional division between economics and politics is collapsing. The analysis of power relations, which used to be the focus of political science, is becoming very important to understand the 'contested nature' of market exchanges; moreover, opening the 'black boxes' by which firms used to be characterized in economic theory has focussed the attention of economists on the internal politics of the firm. At the same time politics has been increasingly characterized as an exchange between utility-maximizing voters and vote-maximizing politicians.

This book is divided into three parts that focus on these stimulating developments of the relationship between economics and politics. The essays contained in the first part examine the internal politics characterizing such traditional economic organizations as firms and the power relations existing in the most classic economic institution: the marketplace. The second part considers the 'market exchange' and, in general, the economic view of political relations; the working of democracy and the rationale for constitutional constraints are examined within this framework. Finally, the last part shows that the analysis of social change can successfully exploit the two-way 'contamination processes' that have been examined in the first two parts. Nationalism, exclusion of minorities, the rise of dictatorship, and in general social change require a joint and interrelated analysis of economic and political factors.

We will briefly consider in the final three sections of this introduction how each paper contained in this book contributes to overcoming the traditional fences that used to separate economics and politics. In the next section we will give a brief account of the reasons that motivated the erection of those protective fences and the factors that made the social scientists feel increasingly uncomfortable about the fields they intended to enclose.

The demise and rebirth of political economy

Social scientists and political philosophers commonly represent human interactions as exchanges; the terms social contract, electoral marketplace,

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