Radical Political Economy: Explorations in Alternative Economic Analysis

Radical Political Economy: Explorations in Alternative Economic Analysis

Radical Political Economy: Explorations in Alternative Economic Analysis

Radical Political Economy: Explorations in Alternative Economic Analysis

Synopsis

Radical political economy is built upon the formal analysis of neoclassical economics and the tradition of Marxian/radical analysis. The essays presented in this book offer a representative sampling of the issues and methodologies involved in the study of radical political economy.

Excerpt

The origins of modern economics are usually traced back to the 1776 publication of Adam Smith Wealth of Nations. The full title of Smith work--An Inquiry into the Nature and Causes of the Wealth of Nations--indicates the breadth of his concerns. And indeed, for about a century following the publication of Smith's seminal work, economists remained concerned with broad social issues such as the determinants of economic growth, national prosperity, and the distribution of income and wealth. For them, the question of appropriate institutional arrangements and the relation between economic and other social issues was critical. In the era of the classical economists, broadly spanning the period from Smith to Marx (who died in 1883), economists characteristically considered themselves to be political economists and their discipline political economy.

In the last quarter of the nineteenth century, marginal analysis emerged, the concept of marginal utility came to the fore, and the so-called neoclassical economics was born. The attention of economists shifted from broader social issues to more narrowly defined concerns, typically related to maximization problems in the sphere of what is currently called microeconomics. Turning away from broader social and institutional questions, economists focused on the behavior of the consumer and the firm, seeking to specify how they could allocate resources to maximize their welfare or profit. The term "political economy" was replaced by "economics." Serious concern with the economy as a whole and its broader implications for social life was not revived until the Great Depression of the 1930s reawakened consciousness that the institutional environment of the Western world could not be taken for granted.

In this context, John Maynard Keynes published (in 1936) The General Theory of Employment, Interest and Money. Keynes's key finding concerned the inadequacy of the neoclassical economists' comfortable assumption that economic downturns would automatically generate forces adequate to bring about recovery. Keynes showed that an equilibrium could be sustained in a capitalist . . .

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