Academic journal article The American Journal of Economics and Sociology

The "New" Political Economies

Academic journal article The American Journal of Economics and Sociology

The "New" Political Economies

Article excerpt

IN 1651, 350 YEARS AGO, a French writer named Montchretien wrote a book on the subject of "political economy." This expression stuck and important multi-volume treatises on political economy appeared during the following centuries. In 1890, Alfred Marshall entitled his masterwork simply Principles of Economics, reflecting a trend at Cambridge University to remove politics from economics. But this trend was not just at Cambridge. During the 1920s the German society known as the Verein fur Sozialpolitik heard from such economists as Max Weber and Ludwig von Mises who argued for "value-free" social sciences. The American Journal of Economics and Sociology is now planning an entire gala issue on the connections between politics, political science, government and economic theory. You are invited to participate.

It is clear that, throughout the centuries, economists have understood the influence that institutions, customs, and varying legal rules have on incentives and the role they play in giving shape to different market outcomes. Indeed, economists giving "policy advice" have served as advisers to statesmen, legislators, and dictators. This is still a common practice. Professional economists claim a privileged status for their craft. But do they really stand outside the legislative process with a talent for seeing things "objectively"?

After World War II, the governments of the developed nations were assigned the difficult task of "stabilizing" the business economy. In recent years, economists have come to appreciate that macro-policymaking, whether in J. M. Keynes' time or our own time, is mostly a "sequence of decisions" made over time. Private citizens often understand more than they are told. …

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