20 September 2007

Nothing Special

Daniel Hogendoorn

My thesis aims to show how the terms ‘political’ and ‘economic’ can be applied and defined in various ways; some ways make it easy to see the interconnectedness of the subjects, but others show the worth in keeping them separate. As Underhill points out, for the academic subject of Political Economy (PE) it is not very useful to apply a distinction between the two domains: ‘Political interaction is the means by which economic structures of the market are established and in turn transformed’ (Stubbs 2006). But, as we will see, not discriminating in other areas may be as foolish.

Economics can be divided in many ways, such as macro- and micro-economics or positive and normative economics. The former pair is relevant to my thesis: while Macro-economics concerns itself with state finances, fiscal policy, unemployment and aggregate supply and demand, and is thus clearly political because of both its tinkering with the economic structure and the direct involvement of the state, micro-economics is only so because the structure it rests on is made and maintained by political processes. In this sense, micro-economics is the software running on politically made hardware; the rules of micro-economics, once established, have almost nothing to do with the political. Economics here is thus a distinct subject, with it’s own subject matter. To illustrate this an unimaginative newspaper article suffices. Hotelprijzen naar recordhoogte(ANP 2007) basically rehashes the fundamental model of supply and demand, ceteris paribus, with hotel-room prices skyrocketing due to scarcity. Although reasons for a shortage in hotel rooms might be different in North-Korea, stopping short with observing that this is because of the capitalist state system would not be helpful to understanding the economic laws within this system.

And the political? One associates Lasswell’s definition ‘politics is who gets what, when, where, and how’ immediately with abovementioned interconnectedness, and skips over the fact that the political can also be defined (and in most cases it is) as that what concerns the state or the government (Scruton 2007). In this sense the political encompasses non-tradable, non-material and invaluable concepts that have only indirectly something to do with the economic. An important example is the question of (perceived) identity. The Islam-debate that is currently taking place in Holland is political, but not economic, and should be studied as such. The included newspaper article, Wilders bepleit verbod op de Koran, shows how rhetoric and ideas can influence (perceived) reality without touching a dime. (NRC 2007)

Of course, there is a strong link between the two domains. Stubbs & Underhill note that the political and the economic cannot be separated in a meaningful way, and that these domains, in the form of markets and states, have a mutually influencing dynamic (i.e. governance) – outwards and inwards, so that, as such, there is also no meaningful way to distinguish between the national and the international. By now I hope to have put some nuance to this, but I do accept, and will use, these criteria as fundamental for PE.

The article Milieu in China: de grote sprong achterwaarts, is a typical subject for PE, in which the political and economic are inextricably intertwined (Leijendekker 2007). It is an adaptation from the academic article The Great Leap Backwards by Elizabeth Economy in Foreign Affairs, and deals with the environmental policies of China, that require hard to accomplish top-down political changes in the structure of the local governments, and needed to prevent economic malaise throughout the region. (Economy 2007)

I hope to have showed that it is useful to bear in mind that Underhill’s adage of the State-Market condominium is not a political-economical condominium. Although the examples I used to this end can be viewed in a PE manner (respectively: supply and demand inherent in the system; a member of parliament can make his statements because of the revenues collected from the taxpayer), it is not wise to do exclusively so.

ANP (2007). Hotelprijzen naar recordhoogte. NRC HANDELSBLAD.

Economy, E. C. (2007). The Great Leap Backwards. Foreign Affairs: 7.

Leijendekker, M. (2007). Milieu in China: de grote sprong achterwaarts. NRC Handelsblad.

NRC (2007). Wilders bepleit verbod op Koran. NRC HANDELSBLAD.

Scruton, R. (2007). The Palgrave Macmillan Dictionary of Political Thought. The Palgrave Macmillan Dictionary of Political Thought. New York, Palgrave Macmillan: 744.

Stubbs, R. U., Geoffrey R.D. Underhill, Ed. (2006). Political Economy and the Changing Global Order. Don Mills, Ontario, Oxford University Press.


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