Intro to the Study of Intro to the Study of Political EconomyPolitical Economy

September 17

Overview of Lecture

• Resources for students

• Economics/Politics/Political Economy?

• Thinking about capitalism

• What is a good (or successful) economy?

Scott Library Workshops

Undergraduate Research SeminarsCovers library policies, finding books using the library catalogue,

finding scholarly articles using online databases. • Thursday, September 21, 1:00-2:30 pm • Friday, September 25, 11:00-12:30 pm• Wednesday, September 30, 6:00-7:30 pm• Wednesday, October 7, 2:00-3:30 pm• Wednesday, October 14, 2:00-3:30 pm• Wednesday, October 15, 10:00-11:30 am

Academic Support Services

• Learning Skills Services: provides help with academic writing, critical thinking, reading and note-taking, study secrets, time management, etc.

• Centre for Academic Writing: offers individual tutoring, workshops and resources for undergrads to help them develop their academic writing skills. Includes assistance for ESL students.

Economics for Everyone Website

• www.economicsforeveryone.com

• Glossary

Canadian Encyclopedia online

• Political Economy by James Laxer

• Economics by Paul Davenport

• Economics, Radical by Cy Gonick

• The State by Leo Panitch

• Politics by Garth Stevenson

• Political Science by Reg Whitaker

Economics for Everyone by Jim Stanford

“If there’s a simple, overarching theme running through this book, it’s the idea that people have to fight for whatever they get from the economy” (Stanford, 2008: 12).

Economics for Everyone

Stanford: “I believe that studying economic history and the history of economic thought is an inherently subversive undertaking. It refutes the assumption that capitalism is ‘natural’ and hence ever-lasting, and the related claim that economics is the neutral, technical study of that natural, ever-lasting economy” (2008: 9).

Economics/Politics?

“economics is simply about how we work…Economics is about who does what, who gets what, and what they do with it” (Stanford, 2008: 1).

This echoes a famous definition of politics by political scientist Harold Lasswell. He stated that “politics is who gets what, when and how.”

A Broad Conception of Economics Along with markets and exchange,

“Economics also involves studying many other things: history, technology, tradition, family, power, and conflict” (Stanford, 2008: 24).

Economics is a social subject

“because we interact, cooperate, and clash with each other in the economy…economics is a social subject” (Stanford, 2008: 1).

Economics is about politics & power “debates over economic issues are not

technical debates…They are deeply political debates, in the broad sense of that word: distinct groups of people have distinct interests, they know their interests, and they naturally work to promote them” (Stanford, 2008: 3).

What is political economy?

At the most basic level, it is the intersection of politics and economics.

The state and other political actors play a role in shaping the economy.

In turn, the outcomes of the economic system have broadly political ramifications.

Political Economy as a discipline “the first economists called their discipline

‘political economy’” (Stanford, 2008: 24). Adam Smith, David Ricardo, Thomas

Malthus, John Stuart Mill were all students of political economy

Karl Marx provided a “critique of political economy”, but is often considered to be one of the classical political economists

Political Economy as a discipline

in Canada Strong history of political economy as a discipline. The Canadian Journal of Economics and Political

Science was published from 1935-1967. Then it basically split into the Canadian Journal of Political Science and the Canadian Journal of Economics.

The University of Toronto had a department of political economy up until 1982. It was not until then that it split into the separate disciplines of political science and economics.

Studies in Political Economy has been published since 1979.

Economics as a “Science”?

“Economics is a social science, not a physical science” (Stanford, 2008: 23).

What does that mean?

Economics and Normative Questions “Economics is not a neutral, technical discipline”

(Stanford, 2008: 4). Stanford: “economists of all stripes carry political

baggage. I certainly do.” (2008: 8). Stanford: “most economic theories over the

years have been motivated by political considerations. Modern economics (including this book!) is no different: economics is still a deeply political profession” (2008: 25).

“Most economists…like to pretend that their profession is ‘scientific’ and hence value-free, but this is a charade” (Stanford: 2008: 29).

Capitalism

Capitalism is a particular form of economy. It developed historically in particular parts of

the world and have spread elsewhere. Certainly capitalism covers the world today. Stanford suggests that other kinds of

economies are likely to emerge in the future of humanity (2008: 5).

What is specific to capitalism? “Most people have to work for others, in

return for a wage or salary” “A small proportion of society owns the bulk

of wealth, and uses that wealth in an effort to generate still more wealth”

“Competition between companies, each trying to maximize its own profits”

(Stanford, 2008: 5).

Characteristics of Capitalism

Capitalism is “dynamic: flexible, creative, always changing” “conflictual: with ongoing struggles and

conflicts between different groups of people” “unstable: exhibiting periods of growth and

prosperity followed by periods of stagnation and recession”

(Stanford, 2008: 7-8)

What is a good (or successful) economy?

How do you define a successful economy?

How do you measure success?

Gross Domestic Product

• GDP is a very common measure, regularly cited in the mass media.

• Refers to the dollar value of all goods and services produced in an economy.

• Nominal GDP or Real GDP

• GDP/capita

Limits of GDP as a measure

• Ignores unpaid work (disproportionally performed by women)

• Does not differentiate between different forms of economic activity or take into account any negative impacts of economic activity (such as environmental degradation)

• Ignores the distribution of economic activity and income

Measuring Economic Success Joseph Stiglitz, “Lies, damned lies and GDP

Statistics,” Toronto Star. September 13, 2009. Martin Regg Cohn, “How to measure Gross National

Happiness,” Toronto Star. September 15, 2009. Commission on the Measurement of Economic

Performance and Social Progress National Post editorial board, “The Quantification of

Happiness,” National Post. September 16, 2009. The Canadian Index of Wellbeing

UN Human Development Index1 Iceland

2 Norway

3 Canada

4 Australia

5 Ireland

6 Netherlands

7 Sweden

8 Japan

9 Luxembourg

10 Switzerland

2008 Report

(2006 data)

http://hdr.undp.org/en/statistics/

Other UN indices

Gender Related Development Index (GDI)

Canada ranks 4th

Gender Empowerment Measure

Canada ranks 11th

Human Poverty Index (2007-08 report)

Canada ranks 8th