Defination of Political Economy

Political Economy

The term political economy came into general use in the eighteenth century and meant the measures taken by governments to regulate trade, exchange money and taxes (roughly what would now be called economic policy). By a natural progression the term came to be applied to the study of these and other economic questions; political economy became a recognized academic profession and was increasingly considered a science. In some places (Scottish universities, for example) it is still the term normally used to denote what is elsewhere more usually called economics. But, especially under the influence of W.S. Jevons (1879; 1905) and Alfred Marshall (1890), ‘economics’ had for the most part replaced ‘political economy’ by the end of the nineteenth century, although some economists continued to distinguish between the two, reserving the term political economy for questions of policy (e.g. Robbins 1939).

The most significant distinctions to have been made between the two terms have, however, been associated with the history of Marxism. In 1843 Engels, shortly to become Marx’s close collaborator, published an article with the title ‘The outlines of a critique of political economy’ (Engels 1975 {1844}). He argued that the new economic thinking, favoring competition and free trade, which began with Adam Smith, was ‘half an advance’ on the mercantilism which had gone before, but, by not questioning private property, was guilty of covering up the fact that capitalism necessarily led to social and economic evils. Such ‘sophistry and hypocrisy’ tended to increase with time so that Ricardo was more guilty than Smith, and Mill more guilty than Ricardo.

Over the next thirty-five years, Marx, in his own economic writings, greatly enlarged, deepened and refined this critique in works such as Contribution to a critique of Political Economy Marx (1976 {1859}), which itself bears the subtitle, A Critique of political economy. By political economy Marx meant the body of economic thinking which began with Adam smith and included Ricardo, Malthus and others, roughly corresponding to what are now known as the classical economists. In using the term, Marx was not departing from the general usage known as the classical economists. In using the term, Marx was not departing from the general usage of the day but his critique paved the way for a change in meaning.

Marx was both a strong critic and an admirer of the tradition of political economy, especially of Smith and Ricardo. But he distinguished the honest, if sometimes mistaken, pursuit of truth by some political economists and those increasingly abundant economic writings whose purpose was merely to legitimize capitalism (which he sometimes called ‘vulgar economics’). Marx and Engels believed that political economy as a science arose alongside capitalism: because the exploitative nature of pre-capitalist economic systems was transparent, they did not require a science to explain them, merely an ideology (generally a religion) to legitimize them; but, since the nature of capitalist exploitation was opaque (being hidden behind the veil of money and market relations), it needed its own economic science (political economy) to reveal it.

For Marx, a truly scientific political economy, in order to reveal this hidden exploitation, must study not only exchange but also the nature of production and labor. Vulgar economics concealed capitalist exploitation by treating all relations as exchange it was therefore, an ideology rather than a science. Marx came apparently to recognize in classical political economy slightly more than Engel’s ‘half an advance’ and dated its definitive vulgarization a little later than Engels had done in 1844.

This distinction between (scientific) political economy and (vulgar) economics has been a constant in critical, and especially Marxist, economic thinking. But there have been moments when the vocabulary has acquired a special importance. The revival of Marxist economic analysis in Western Europe and the USA from the late 1950s onwards took the term political economy as a kind of symbol. This reflected both the desire to re-emphasize methodological differences with an increasingly rampant (vulgar) economics and also the need for a code name in places, such as the exceptional flowering of articles, books and university courses bearing the title of The Political Economy of... (a tendency strongly influenced by Baran 1957). Although this political economy expressed a renewed interest in the questions and methods of the classical economics and of Marx, the use of the term became increasingly loose, often simply denting economic analysis which introduces non-economic (especially political) factors.

In this looser sense the term has come to have attractions for anyone whose view of economic life extends beyond the confines imposed by much orthodox economics. Since around 1980 the term political economy has spread on an unprecedented scale, partly losing its association with Marxism. The growing fields of international political economy, for instance, tends to see political economy rather eclectically as a set of questions in which politics and economics are enmeshed and which can be answered via differing ideological approaches – liberal, nationalist, Marxist and others (see Gilpin 1987). On the other hand, some economists, without describing what they do as political economy have concerned themselves increasingly with the kinds of issues which preoccupied the classical political economists, such as the relationship between the design of wage and labor systems and the profitability of capital (Bowles 1985). In these ways the distinction between political economy and economics is becoming more blurred.

The term has also undergone a number of mutations. In the USA political economics is sometimes preferred, as in the organization, the Union of Radical Political Economics and its Review of Radical Political Economics. Of more recent coinage is ‘political ecology’, an attempt to apply some of the methods of political economy, especially in its Marxist sense, to ecological questions. More confusingly, political economy is being used to connote the economic and political characteristics of a political place (country, city, region). References to such concepts as ‘the European political economy’ (as a replacement for ‘the European economy’) are becoming increasingly common but have almost no relationship common but have almost no relationship to earlier, more analytical meanings and simply raise the level of incoherence in the use of the term.

Role in the Transition to Democracy

The wave of democratization that swept southern Europe, Latin America, and Eastern Europe in the mid-1970s and in the late 1980s brought to the fore the relationship between bureaucracy and democracy. In the democracies that have emerged in the last quarter of the twentieth century, the civil service may be far from responsive, reliable, and responsible. A civil service may be far from responsive, reliable, and responsible. A civil service that has been associated with an authoritarian regime can easily be considered illegitimate after the transition to democracy takes place. To prove it legitimate, the civil service must submit to the leadership of new democratic governments. Such governments often begin their terms in office by "cleansing" the ranks of the civil service of authoritarian elements. Thus the civil service of authoritarian elements. Thus the civil service in a new democracy is vulnerable, more so if it has traditionally proved to be inefficient.

Nevertheless, new democracies put a difficult double task to their civil service: to remain weak and pose no threat to democratic government and, simultaneously, to help legitimate the democratic regime by improving its economic performance over that of the previous, authoatarian regime. The evaluation of the performance of the civil service in a new democracy is based in a trade-off between these two demands.

In fact, additional conflicting pressures may be exerted on the civil service of a new democracy. The democratic state needs a civil service that is to a certain extent resistant to all governments in order to safeguard the well being, the security, and the defense if the people living within its territorial boundaries. This demand of the people living within its territorial boundaries. This demand clashes with drive of the government party (or coalition of parties) to use the capacities of the civil service freely to fulfill their election promises. For instance, nationalist governments may want to expand the state freely to fulfill their election promises. For instance, nationalist governments may want to expand the state beyond its boundaries, socialist ones to reform it, neoliberal ones to reduce its economic functions to a minimum. Political parties that govern in new democracies may use the civil service for any of these purposes, depending on their profile and the constraints they face once in power.
The removal of elements of the previous authoritarian regime from political institutions is part of the tradition to democracy, and its extent is heavily debated in young democracies. Still, if the democratic government dominates political institutions, like the legislature and the judiciary, and also permeates the civil service, democracy suffers from the reduction of multiple centers of power into a single one-that is, the governing elite. If, as is often the case after the new democracy is even more concentrated. Chances are that the civil service will become responsive only to the needs of the leadership of the governing party. Democratic consolidation, which followed the initial transition to democracy, leaves muchn to be desired in such circumstances.

Yet the permeation of the civil service by the governing Democratic Party (or coalition of parties) does not necessarily undermine the legitimacy or post authoritarian democracy. In post authoritarian democracies, civil servants cannot be fired all at once, even if they have been politically socialized to serve authoritarian governments. The recruitment of new civil service personnel, with records of resistance against the depend dictatorship, may serve as an injection of democratic legitimacy into a suspect body of civil servants. Otherwise, the existence of an intact civil service that is known to have collaborated with nondemocratic rulers may compromise any efforts to deepen and expand democracy. It should be kept in mind, however, that the deepening and expansion of democracy is often pursed by political elated only to extent that they can control the outcome of opening up institutions, such as the civil service, to democratic participation from below.
In the early phases of the transition to and consolidation of democracy, a state needs a strong government aided by a competent civil service for a number of reasons. During that time a competent civil service is instrumental in keeping at bay military and security forces and countering pockets of supporters of authoritarian rule in other institutions. Moreover, rarely do new democracies emerge amidst economic prosperity. New democratic governments often must grapple with economic stagnation or decline as they strive to consolidate democratic rule. Again, an efficient civil service may play a strategic role in economic recovery and thus contribute indirectly to the legitimating of the democratic regime.

In conclusion, a civil service, which in a new, unstable democracy must be weak in the face of alternating democratic governments and strong in the face of undemocratic challenges and economic adversity, feels strongly the difficulties of democratic consolidation. A young democracy that counts on competing democratic parties to consolidate life disagreeable and resort to the civil service as a pillar of democratic stability. The quest for democracy involves, among other things, striking a delicate balance between the elected government and the civil service.

Change and Reform

The tasks of civil service have changed over the past two centuries, adapting to the changing role of the state in the economy and society. In the beginning of the modern era the role of the state was limited to waging wars and collecting taxes. Gradually, the state took up more functions, such as monitoring the national economy and providing welfare services. The expansion of state activity led to the growth and differentiation of the civil service. For some time now, particularly in developed societies of the poet-World War II era, central government institutions have felt the need for more and increasingly specialized civil servants to deal with increasingly complicated problems that require expert knowledge and technology.

IN some developing and underdeveloped societies, however, the growth of the civil service was not commensurate with need to adapt to economic development and the complexity of available technology. Instead, expansions in the civil service were motivated by the need to absurd excess labor from among internal migrants, the young, and the unemployed and to preserve the leverage exercised by political elites through patronage. The more visible presence of the state in the economy and society then gave rise to demands for new and better service by the state. The new demands on the state were nourished by the labor struggles and the wider participation of the working class in the democratic politics of Western Europe and North America.

Recent debates on the socioeconomic role of the state concern not only the extent of its intervention but also the efficiency with which political and civil service elites steer the economy in an antagonistic international environment and the quality of the services offered by civil servants to the citizens. Whereas some earlier transformations of the civil service were prompted by changes in the relations between state and society, some recent changes can be increased efficiency and imposed services.

The call for greater efficiency has often meant that the size of the civil service is trimmed, as governments-particularly in Europe-privatize services previously offered by large state monopolies (for example, national airlines and telephone companies). Alternatively, contemporary governments seek to modernize the organize the organization and methods of public administration. Such modernization involves training civil servants in new technologies, especially the use of computers, and teaching new skills related to better planning and evaluation of civil service activities. Governments have resounded to the demand for higher quality service by attempting to change the attitude prevailing in the civil service from inertia and aloofness to flexibility, attention to quality work, and sensitivity to the needs of citizens. They are also attempting to inform citizens about the services to which they are entitled.

The System of Positions

The system of positions is an alternative to the career system, but it sometimes applied along with it. In the position system the needs of ministries and public agencies for new personnel are registered. Job openings are outlined, with descriptions of the duties and qualifications of each position. Public employees are hired on a limited contract; when their contract expires, they may be rehired or let go.

The civil servant in the position system does not have the special relationship with the states that the career civil servant does. Although the uncertainty of employment and advancement may be drawback for the position system, there are advantages. The position system is superior to the career system in that recruited employees have specialized skills, and the government enjoys flexibility in hiring similar to that of private enterprises (which hire by position). In the position system, civil servants are recruited not to begin a career period of time, under a contract comparable to those in the private sector. The position system is found into eh United States and, in a particular sense, was used in the Soviet Union and Eastern Europe.

A strong anti-elite sentiment has permeated the organization of the civil service in the United States almost from the country's beginning. In the nineteenth century the American federal bureaucracy was highly politicized: civil service positions were handed out in exchange for political support, an allocation system known as the "spoils system". The abolition of the spoils system was accomplished gradually, beginning with the Pendleton Act of 1883.

In the United States today, job openings are announced in conjunction with job descriptions. Applicants pass through a selection process, based on merit; successful candidates are offered a contract that binds the administration to keep the employee in the same position. The employee may be transferred to other posts after the contract expires. Top positions are also open to competition, but in the late 1970s there was an effort to creator administrative elite, the Senior Executive Service, which included approximately the 6000 highest officials into eh civil service. Still, incoming presidents of the United States layers of the federal administration with temporary advisers. Some degree of politicization characterizes state and local-level administrations as well.

In Canada civil servants are appointed on the basis of merit; they are selected from an inventory of candidates who have successfully passed examinations and interviews in career areas of their choice. Having entered the civil service, Canadians may develop their career through promotion and transfer among several dozen of departments and agencies. Recruitment to new positions is accomplished through competitions, first within public service and then outside public service.

Compared with the career system, the system of positions, as applied in Canada and the United States, allows for more personnel mobility and perhaps a better match of person to task. Yet the position system offers less prestige for the high and middle ranks of the civil service and is vulnerable to wider politicization of the top echelons of the bureaucracy.
With significant variations the system of positions was also applied in Eastern Europe and the Soviet Union under communism. Officially, employment in the communist public administration did not entail a special labor relationship, like the relationship, like the relationship between the civil servant and the state in the West.

In the Society Union, in particular, civil servants did not formally enjoy the guarantee of tenure or the prospect of a career in the administration. Once hired, civil servants could be fired or transferred, but in practice they occupied the same position for long periods of time. The content and development of a civil servants job was not specified in advance, but civil servants who showed competence and loyalty to the Communist Party were compensated with higher-ranking positions. On the whole, because of their access to better goods and services, Soviet civil servants enjoyed higher living standards than the majority of the population, and top bureaucrats had considerable privilege