Economists must not only know their economic models, but also understand politics, interests, conflicts, passions} the essence of collective life. For a brief period of time you could make changes by decree; but to let them persist, you have to build coalitions and bring people around.
You have to be a politician. }Alejandro Foxley, Chilean Minister of Finance (quoted inWilliamson and Haggard )
So what then do we mean when we talk about political economy ???
As the great English theorist and historical EH Carr would say, we are talking about two things that are similar – but not identical.
When talking about political economy we are talking about two things that are very different – but must always be examined together.
Politics and economics are intrinsically and inextricably linked, and cannot study or talk about one without studying or talking about the other.
So what do we mean by EACH of these two terms ???
Economics is actually the easier of the two to define.
Economics can be defined as the system that every society has for organizing the production, distribution and consumption of goods and services.
Power as Domination – individual or groups are able to impose their will on other individuals or groups through the use, or the threat of the use, of force … at the macro level, this takes the institutional form of military – dealing with EXTERNAL threats / and the police, for maintaining INTERNAL order
Power as Coercion – the imposing of someone’s will not with the threat or use of force, but rather through the limiting, or threat to limit, the access of an individual or group to that which they need to survive physically … at the macro level, power as coercion is best understood as economic power – I won’t threaten to break your arm, but I will fire you from your job if you don’t do what I say …
Power as Manipulation – this is the power of television, of the Internet, of all media … it is getting people to do what you want them to do by getting them to want to do what you want them to do … after all, no one is forcing or coercing anyone to watch tv or surf the internet for 10 hours a day … ;-) … and last but not least,
Creative Power – this is the power a teacher or artist or coach or therapist has in the ability to take potential – intellectual, aesthetic, athletic or emotional in nature – and turn that potential into something real.