I was in the beautiful city of Coimbra last week, for an intriguing conference, The Revival of Political Economy: Prospects for Sustainable Provision, organised by the multi-disciplinary Centre for Social Studies there. 'Political economy' is a peculiar term these days, that always summons up more than a reference to mere academic discipline. Either it means something normative, or political, or historical, or inter-disciplinary. I offered some sort of vague definition here: "political economy is a field of study that refuses to separate politics from economics, but on the other hand does not believe that one can be collapsed into the other". But that's scarcely good enough.
As far as the conference was concerned, it seems that there are three ways of considering the meaning of 'political economy', each of which has different implications for its 'revival' (and hence alleged death).
1. Bringing the state back in: Peter Hall gave one of the keynotes, entitled 'The political origins of our discontents', which examined the electoral preconditions of the historical and spatial transformations in the institutions of capitalism over the last 50 years. Hall offered a good deal of evidence showing that the shift towards neo-liberalism in the UK and US (what his famous 'varieties of capitalism' approach terms the Liberal Market Economies) did not benefit the majority of voters, by most measures of wealth, income and wellbeing.
The question is then posed: how did this work politically? To which his answer was that it relied on the post-68 fragmentation of class voting patterns. As far as the Coordinated Market Economies (France, Germany, Holland) were concerned, he argued that they had devolved the tasks of neo-liberalism upwards to the European Commission. I put it to him that maybe he was over-stressing elections anyhow, and missed the importance of disciplinary apparatuses to the political sustainability of neo-liberalism - New Public Management, surveillance, prison - and he generously agreed.
Robert Boyer was another notable keynote, offering his classic Regulationist approach to the financial crisis, focused more on internal contradictions in a mode of political-organisational regulation. Boyer argued that 2010 has turned out to be a key year in the crisis, the moment at which it shifted from a crisis of private debt to public debt, thereby ensuring that (and this is the regulationist definition of a 'major' crisis) available policy solutions were part of the problem, and not the solution.
What is striking about Boyer's analysis is the importance of complexity in the current crisis. It was (and remains) a crisis of credit, in which the core relationship of credit and debt was bundled up, moved around and sold in ways that thereby destroyed its defining characteristics. The trust and belief that is essential to the notion of credit were thereby lost, in a miasma of enthusiasm and salesmanship, focused initially on credit itself.
2. Reversing marginalism: One of the pleasures of these conferences is to learn from the history of economics. For some of the speakers, the task of 'reviving political economy' involves working out where and how it was lost in the first place, that is, what became of the tradition of Smith, Ricardo, Marx and Mill. In this respect, 'political economy' means economics that engages with institutional, political and sociological questions, as it did for almost a century after the publication of The Wealth of Nations.
A paper by Mario Graca Moura and Antonio Almodovar looked at the marginalist revolution of the 1870s (the birth of neo-classical economics) in terms of the tensions within political economy that led up to it, the fears that it was developing excessive breadth of analysis, and John Stuart Mill's worries that it wasn't a proper science. The question was what would it have to lose in the process, if it were to gain seemingly scientific status. Classical political economy had the normative unity of purpose (Marx excluded) of liberalism but methodological plurality; this was inverted by the marginalists, who eliminated all moral and political concerns from economics in order to attain unity of method. Their paper also included some interesting analysis of the meaning of the word 'orthodox': to do 'orthodox' economics is to use a single set of deductive mathematical principles, therefore leaving 'heterodox economics' as anything which doesn't.
Nuno Martins took this type of analysis even further, to ask which aspects of classical political economy today are shared by 'heterodox economics', and could therefore provide the focus of a 'revived' political economy. By 'heterodox economics' he referred to Marxism/Marx, the Austrian tradition/Menger, Institutionalism/Veblen and Post-Keynesianism/Keynes, each of which has its own distinct critique of neo-classical economics.
But if heterodox economists are to unite in opposition to neo-classical economics, what do they focus their critique on? For Martins the choice is between its theory of value (utility), its notion of agency (exchange) or its material focus (scarcity). In each case, political economy offers respective alternatives by way of replacement: they labour theory of value, the analysis of production, and the assumption of surplus. So we have a choice of where to begin.
My concern with these historical approaches, as fascinating as they are, is that they assume that political economy only broke up into 'orthodox' and 'heterodox' economics. But of course the demise of political economy also coincided with the emergence of sociology and psychology as academic disciplines, filling spaces newly created by the shrinking of economics as a science (as Simon Clarke has argued). Not only that, but the normative and critical aspect of classical political economy must have disappeared somewhere, and not only into Marxism. Maybe that's what someone like Erik Olin Wright (see my review) or the civic republicans such as Philip Pettit are trying to revive. So that suggests another way of 'reviving' political economy...
3. From value to values: The reason I was in Coimbra was for the special sessions on 'commensuration, incommensurability and public decision' (my paper was on the use of 'subjective wellbeing' as a government accounting tool, as exemplified in the DCMS Case programme). There were some good papers on different ways of making goods commensurable - or not - using techniques such as Cost Benefit Analysis, as Rita Samiola's paper on Venice flood defences examined. 'Incommensurability', in these types of cases, refers to types of social or cultural value that refuse to be admitted into a government effort to calculate, compare or quantitatively weigh up.
But how to talk about that value? I was asked how it was possible for a sociologist to speak about the 'intrinsic value' of anything. Of course there is the risk of lapsing into theology, romanticism or mysticism. One alternative, as suggested by the session organiser Laura Centemeri, is to view incommensurability in terms of political resistance - never unconditional, but an effort to refuse economic rationalisation in the name of some normative commitment. Hence a footballer, artwork or body organ can be 'priceless'... but only until the price is high enough. Rationalisation can be resisted, just not always or not forever. Moral philosophy may therefore be required to argue how and why we attribute intrinsic values to things (such as human life, rights, public goods), but sociology contributes by examining strategies and techniques for defending such value, in the face of governmental and managerial efforts to dissolve it via quantification.
What syntheses are possible between the above three approaches? Arguably the first exaggerates the significance and coherence of the nation state, the second overlooks nearly all post-War theory of any kind, and the third can end up celebrating disagreement for its own sake. What they share, surely - and here we come back to Arisotle - is some recognition of the legitimacy of speech as the conveyor of interests, and of the potential value of economic procedures, not merely outcomes.