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his stay in England in the 1930s and finished after

emigration to the United States.

He sought to explain the breakdown of

nineteenth-century liberal capitalism which led

to the turmoil of the 1920s and 1930s. In a critique

of orthodox economic theory, he argued first that

its analysis did not apply to all forms of economy,

and, second, that the market was not selfregulating.

Before market capitalism, economic

exchange had been embedded in social structures

regulated by norms of either “reciprocity” and/or

“redistribution.” The determination of economic

exchange exclusively by market price destabilized

social and political order; and the fundamental

economic “factors” – land, labor, and moneycapital

– were, in fact, “fictitious commodities.”

The free market in land created environmental

degradation; in labor, human misery; and in

money, inflation and financial crises. This led to

a “double movement” in capitalism between, on

the one hand, states’ creation of these socially and

politically “disembedded” markets and, on the

other, the efforts to regulate their worst effects.

Thus, by the end of the 1930s, there was a swing

towards regulation in all sectors of the economy

and the beginnings of the modern welfare state.

Polanyi’s critique of the self-regulating market has

experienced a revival following the economic liberalization

and globalization of the late twentieth


Other important works by Polanyi are, with

Conrad Arensberg and Harry Pearson, Trade and

Market in the Early Empires (1957), and the posthumous

The Livelihood of Man (1977).


political economy

Classical political economy emerged as a distinct

field of scholarship and policy-oriented analysis

during the eighteenth century, in rough parallel

with the development of a distinct sphere of

profit-oriented, market-mediated economic activities

that was nonetheless seen as dependent on

a wider nexus of legal, political, social, and moral

conditions. In contrast with the later discipline of

neoclassical economics, which studies such activities

in isolation, classical political economy was a

predisciplinary field of inquiry insofar as it tried to

put the emerging capitalist economy in its wider

social context. Adam Smith (1723–90) is exemplary

here, writing not only An Inquiry into the Nature

and Causes of the Wealth of Nations (1776) but also

A Theory of Moral Sentiments (1759) and studies

of jurisprudence, politics, logic, and language.

Other key figures in this tradition are David Malthus

(1766–1834), and David Ricardo (1772–1823)

pluralization political economy


whose work On the Principles of Political Economy and

Taxation (1817) made him its leading figure.

Classical political economy is linked to the rise

of a commercial and industrial bourgeoisie that

sought to challenge the economic, political, and

ideological domination of feudalism and the absolutist

state. It is part of the more general European

Enlightenment. A parallel tradition in

Germany, which was an economic laggard, was

more oriented to the political dimension of the

emerging system of political economy – reflected

in the Polizeiwissenschaften (“police” or policy sciences)

that were concerned with good economic,

political, and moral government on behalf of the

population of a given state.

Following the rolling back of feudalism and the

consolidation of capitalism, the rise of organized

working-class resistance, and the recurrence of

capitalist crises, classical political economy was

slowly displaced by vulgar political economy.

This downplayed the class relations between capital

and labor and the origins of value in the labor

process, began to focus on the efficient allocation

of scarce factors of production to competing uses,

and sought the causes of economic crisis in factors

external to the nature and dynamic of capitalism


Although their work is often mentioned as a key

part of the tradition of political economy, Karl

Marx and Friedrich Engels developed an explicit

critique of classical and vulgar political economy

both as scholarship and as the basis of economic

policy and practice. They elaborated an alternative

account of the capitalist mode of production

based on radically different philosophical assumptions

and a political commitment to the proletariat

rather than the bourgeoisie. Thus a significant

part of their studies was concerned to critique the

economic categories and analyses of orthodox political

economy. Two major examples are Marx’s

Economic and Philosophical Manuscripts (1844 [trans.

1964]) and the three-volume Theories of Surplus

Value (1861–3 [trans. 1963]). They also built on

this critique to provide an alternative account of

the capitalist mode of production, its social foundations,

its dynamic, and its crisis tendencies.

Marx’s Contribution to the Critique of Political Economy

(1859), the Grundrisse (1857 [trans. 1973]), and the

incomplete analysis in the three volumes of Capital

(1867, 1885, 1894 [trans. 1970]) are his best-known

work here. Their guiding theme is that capital is

not a thing (a simple, transhistorical factor of

production) but a social relation that is a historically

specific class relation between persons,

mediated through the instrumentality of things.

Marx argued that the best starting point for

such a critique was to ask why wealth in societies

where the capitalist mode of production is dominant

presents itself as an immense accumulation of

commodities. He regarded the commodity as the

“cell form” of capitalism and, on this basis,

unfolded the key contradictions of capital as a

social relation. He defined the historical specificity

of capitalism in terms of the generalization of

the commodity form to labor power, arguing that

the nature and dynamic of capitalism were rooted

in the inhuman treatment of labor power as if it

were a commodity. Capitalism is the first mode of

production based on the existence of formally free

wage-labor and a labor market in which workers

sell their labor power in a formally free and equal

commercial transaction to the owners of the

means of production, who in turn need this labor

to set the labor process into motion. The resulting

goods and services belong initially to the capitalists

for whom the proletariat works, who are

therefore free to sell these commodities in the

marketplace. Beneath the surface appearance of

free and equal market exchange, however, lay a

despotic world of production in which capital

sought to maximize the production of surplus

labor as the basis for economic exploitation and

the accumulation of capital.

Marxism became a crucial reference point for

the subsequent development of radical, heterodox,

and more orthodox forms of evolutionary

and institutional political economy. This trend is

sometimes signified in the idea that authors such

as Max Weber, Werner Sombart, Joseph Schumpeter,

and Karl Polanyi engaged in a debate with

the “ghost of Marx.” Evolutionary political economy

holds that time matters: there can be no valid

transhistorical analysis of economic activities because

the nature of economic institutions and

conduct, the sites and stakes of economic conflict,

and the scope for economic change depend on

their prior developmental trajectory. And institutional

political economy argues that institutions

matter: there can be no pure, isolated economic

calculation and conduct because these are always

shaped by specific economic institutions and

market relations and their embedding in a complex

extra-economic environment. It is on this

basis that political economy has not only studied

the development of different forms of economic

organization but has also identified a number of

more or less distinct varieties of capitalism.

Vulgar political economy was the basis for neoclassical

economics. This tries to develop a universal,

transhistorical analysis of economic activities

political economy political economy


based on a general model of rational economic

calculation about the most efficient allocation of

scarce resources (factors of production) to competing

ends. Neoclassical economics is associated

with “economics imperialism,” that is, the extension

of economic analysis to social spheres that

are not dominated by profit-oriented, marketmediated

economic activities but are nonetheless

marked, it is claimed, by individual utility maximization

within defined rules of the game.

The extension of this model is the basis for

rational choice institutionalism, theories of constitutional

design and public policy, and a new

form of political economy. BOB JESSOP

political parties

A political party is an association of like-minded

individuals that seeks to gain power in a community

(usually a state) in order to promote its

chosen social order. As a social organization, a

political party has two main functions: interest

articulation and interest formation. Interest articulation

is simply the process of bringing together

within a single organization all the

members of a community who share relatively

similar political views on an issue or set of issues,

and to voice this position in such a way that

existing political institutions heed it. Interest formation

is the process by which a party is able to

shape and influence the political views of the

members of the community at large. This dual

function that political parties perform creates internal

tensions that are solved in different ways

according to the political and organizational outlook

of the parties. At the interest articulation end

of this spectrum, populist parties behave in a

demagogic way and shape their political discourse

and program of governance primarily according

to what is popular in the community at any one

time. At the interest formation end, by contrast,

authoritarian party systems claim that the party’s

primary function is to teach the population

how to behave in a politically enlightened way.

In between are competitive party systems, such

as the ones present in most contemporary electoral

democracies, where this tension is resolved

through compromise.

In modern electoral systems, the legitimacy of

the government rests principally on political

parties. However, party politics acquired a bad

reputation as it came to represent the (sometimes

violent, sometimes petty) struggle between different

factions vying for power. During the period of

formation of modern democracies, key thinkers

and politicians such as James Madison (1751–1836)

and Alexis de Tocqueville saw this factionalism as

one of the main drawbacks of the new era of

democratic politics. From outside the political establishment,

Karl Marx took an equally dim view

of the (bourgeois) political parties that dominated

the scene in his days. In The Eighteenth Brumaire of

Louis Napoleon (1852 [trans. 1934]), he equated

them with propaganda tools that the ruling class

used against the proletariat to give the latter the

illusion of participation, while entrenching their

own interests. Marx’s followers on the Leninist

side would take this characterization of party

politics as the starting point for their construction

of the one-party political model that came to

symbolize socialist and communist states in the

twentieth century. In pluralist political systems,

however, political parties have become the most

common form of social mobilization for participation

in politics. As Max Weber pointed out in

“Politics as Vocation” (1919 [trans. 1994]), with

the bureaucratization of the state and the growth

of mass politics, political associations had to

manage more effectively the drawbacks of electoral

competition, and the professionalization of

their party machinery was an effective means of

ensuring the survival of the organization over

time. Today, therefore, the vast majority of politicians

are professional politicians, paid by states

(if elected) or parties to fulfill their role.

In modern multiparty systems, the most

common distinction between parties is that between

left and right. Historically, this terminology

referred to the physical location of the parliamentary

groups in the French Assembly after the revolution

of 1789. Those on the right side of the

assembly represented principally the interests of

the nobility, while those on the left side of the

assembly represented the bourgeoisie and the

Third Estate. The right tended therefore to be

more conservative and the left more reformist.

This left–right distinction was compounded

throughout the nineteenth century by the industrial

revolution. In effect, the right came to represent

principally the interests of the upper classes

(the former aristocracy) as well as those of an increasingly

wealthier section of the middle classes

(the petite bourgeoisie), while the left represented

the former Third Estate, which became the

working class. Throughout most of the twentieth

century, this left–right opposition dominated

pluralist political systems, be they based on a

two-party model or a multiparty one. In the late

twentieth century, however, with the apparent

weakening of class distinctions, this left–right

configuration began to lose its sharpness. At the

political parties political parties


same time, helped by the drop in electoral participation

in most advanced industrial democracies,

single-issue parties as well as new political movements

(for example green parties) began to

reshape the parameters of party politics.

The level of predictability that multipartyism

gave, to electoral democracies particularly, proved

wrong many of the earlier assumptions about the

negative influence of party politics on political

stability. Although the debate about the pros and

cons of party politics is still alive in many developing

countries, the arguments put forward by

Robert Dahl (1915– ) in A Preface to Democratic Theory

(1956) and in Polyarchy (1971), concerning the stabilizing

influence of political parties, remain

powerful explanations of this phenomenon today.

According to Dahl, what political parties provide

is a multitude of powerful minorities that ensure

that pressure is applied to the faction in government

to take into account the interests of many

different social groups in society. In order to rule

effectively, parties in government find it practical

to reach out to some of the opposition factions

and to create as wide a consensus on their policies

as possible. Besides directly entering ruling coalitions,

what political parties (and the bargaining

process in which they repeatedly enter) create is a

cohesive political culture that underpins the

formal institutions of the polity and strengthens

a consensual model of political rule. This phenomenon

is most obvious in mature party systems

with a strong tradition of pluralism. In developing

countries, as granting the franchise to vote to

the population at large is often a recent development,

the competition between mass parties

and cadre parties (which do not rely on mass

support but simply represent a political front for

groups of powerful interests), remains a source of

instability. FREDERIC VOLPI


This term refers to the process of organizing social

power in a community. Politics takes place at various

levels of social interaction, from the microlevel

– the politics of friendship, family politics,

and so on – to the macro-level (international politics

and global politics). Most commonly, within its

broad field of application, politics is concerned

with the activities of human beings, as Aristotle’s

(384–322 BC) description of human beings as political

animals (zoon politikon) indicates. However, in

the late twentieth century, biologists and specialists

in animal behavior – particularly primatologists

– have argued that non-human animals

living in complex societies could also be described

as having political activities. Aristotle’s The Politics

(c. 350 BC) introduced the terms politic into our

vocabulary from the word politikos meaning “of, or

pertaining to, the polis” (city-state). For Aristotle,

the object of politics was the good of the community

and social order embodied in the polis. As a

practical activity, it was therefore prescriptive in

nature. And the role of the politicians, whom Aristotle

likened to craftsmen, was to ensure the

good functioning of the polity in order to allow

the community to reach its normative goals. The

task of those involved in politics was, and

remains, to establish and implement laws and

rules of government that promote the good of

the community (though not necessarily or systematically

that of each single individual within it).

Because politics is concerned with harnessing

the social forces of a polity into an effective organization,

those models of collective action that can

achieve this feat on a large scale have traditionally

been highly valued. The highest organizational

units for politics have varied significantly over

time, from small city-states to large empires. In

the contemporary context, however, the most

complex form of institutionalized political order

is the nation-state. Today, we may be witnessing

the emergence of an international community

(for example the United Nations) and of powerful

supranational regional organizations (for

example the European Union) but the ability of

these institutions to dictate the rules of the political

game remains tied to the behavior of the

states that compose them. Because of the enormous

power that the state can muster, its political

institutions have always received a high degree of

attention. In this respect, politics is tightly connected

to the science (or art) of government. It is

this art that all the great political thinkers have

tried to describe in new and ingenious ways over


Probably the foremost question that political

thinkers have traditionally been asking regarding

the politics of government is whether a rule ought

to be moral in order to be effective. Classical Greek

philosophers like Plato in The Republic (c. 360 BC) or

Aristotle in The Politics generally argued that it was

so – and so did most Roman humanists and Christian

medieval thinkers in their footsteps. It is not

until the Renaissance that the notion that a political

rule needs not to be just to be successful

began to take the ascendancy. At this juncture,

the works of Niccolo` Machiavelli (1459–1517),

such as The Prince (1513 [trans. 1988]) and The

Discourses (1531 [trans. 1996]), were of particular

importance. From this conceptual transformation

politics politics


comes the notion of raison d’e´tat – the idea that, for

the greater good of the political community, the

state (and its representatives) could and should

behave outside the moral framework that applies

to ordinary individuals. As theorized in works

such as Six Books of the Commonwealth (1576 [trans.

1955]) by Jean Bodin (1530–96) and, most notably,

Leviathan (1651) by Thomas Hobbes (1588–1679),

this rationale for politics was increasingly put to

the service of the absolutist powers that ruled

Europe and its growing number of colonies in

the early modern period. The inadequacy of absolutist

politics and of authoritarianism were highlighted

by thinkers like John Locke (1632–1704) in

Two Treatises of Government (1690) and Baron

Charles de Montesquieu in The Spirit of the Laws

(1748 [trans. 1989]). However, it is only in the late

eighteenth century with the French Revolution

and the diffusion of writings such as the Social

Contract (1762 [trans. 1997]) by Jean-Jacques Rousseau

(1712–78) that politics increasingly became a

matter and an activity for the people as much as

for the aristocracy.

In the nineteenth century, with the extension of

the voting rights to an increasingly larger proportion

of the population (the poor, women, slaves,

and so forth) politics truly became a mass phenomenon.

This transformation of the nature of

the political community had important implications

for earlier notions of “government,” conceived

as the greater good of the state and the

monarch. Now, the state was redefined to include

the nation and a new brand of raison d’e´tat was

introduced, which was influenced by the philosophy

of classic utilitarianism – often known as “the

greatest happiness for the greatest number.” The

notion of utilitarian politics developed from

works such as the Introduction to the Principles of

Morals and Legislation (1789) by Jeremy Bentham

(1748–1832) and John Stuart Mill’s On Liberty

(1859), but also in a different vein from those of

Karl Marx. Under various guises, utilitarianism

and the notion of the good of the people have

remained important justifications of the politics

of government throughout the twentieth century

and up to the present day. It is only towards the

end of the twentieth century, most notably under

the impulse of John Rawls’s A Theory of Justice

(1971), that the utilitarian logic that underpinned

politics slowly began to be partially superseded by

a more ontological and procedural approach to the

political good, grounded on notions of fairness and

justice for each member of the community. This

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