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• The term “Political” derived from the Greek term

(polos) refers to the city-state, the fundamental unit
of political organization in the classical period.
• Political economy therefore originated in the
Political Economy :Etymological Roots management of the political households i.e state.
• Greek origin of the term
• “What economy is in a family, political economy is
in a state.”
• The term political economy is derived from two Greek words
1. polos, meaning “city” or “state,” and
2. Oikonomos=Oikos+Nomos • Political economy thus can be understood as the
 Oikos=House
 Nomos= Law
study of how a country—the public’s household—is
3. Oikonomos means “one who manages a household or estate.” managed or governed, taking into account both
political and economic factors.

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Meaning of Political Economy

• Over its long lifetime, the phrase “political economy” has
Political economy is the study of governance taking had many different meanings.
into account political and economic factors • For Adam Smith, political economy was the science of
managing a nation’s resources so as to generate
wealth.
Political • For Marx, it was how the ownership of the means of
Factor production influenced historical processes.
Political economy is Taking into
Governance
the study account • Two prominent meanings of PE:
1. An area of study (the interrelationship between
Economic economics and politics)
Factor 2. A methodological approach.

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• Methodological approach was divided into two parts—

a) the economic approach (often called public choice)
emphasizing individual rationality and Defining Political economy
b) the sociological approach where the level of analysis
tended to be institutional.
• Offering a conceptual point of view, a dictionary of economic
• Political economy is the methodology of economics applied
terms tells us that
to the analysis of political behavior and institutions. As such,
it is not a single, unified approach, but a family of  “political economy is the science of wealth” and “deals
approaches. with efforts made by man to supply wants and satisfy
desires”
Eatwell, Milgate, and Newman, (1987)
• This approach incorporates many of the issues of concern to
political sociologists. • Political Economy
1. Political economy is the science of wealth
• Because political behavior and institutions are themselves a
subject of study, politics also becomes the subject of political 2. It deals with human efforts to
economy.  supply wants and
• All of this is tied together by a set of methodologies, typically  satisfy desires
associated with economics, but now part and parcel of
political science itself. 5 6

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Stuart Mill:
• “Political economy informs us of the laws that regulate the production,
distribution and consumption of wealth. Political Economy is to the state what
domestic economy is to the family”.
• “The science relating to the moral or psychological laws of the production and
distribution of wealth”.
• Political economy is the study of the social relations, particularly the power
relations, that mutually constitute the production, distribution, and
consumption of resources.
• … concentrates on a specific set of social relations organized around power
or the ability to control other people, processes, and things, even in the face
of resistance.
• A far more general and ambitious definition of political economy is the study
of control and survival in social life.
1. Control refers specifically to the internal organization of individual and
group members,
2. Survival takes up the means by which they produce what is needed to
reproduce themselves.
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• Control processes are broadly political in that they involve the social organization
of relationships within a community.
• Survival processes are fundamentally economic because they concern the
production of what a society needs to reproduce itself.
• The strength of this definition is that it gives political economy the breadth to
encompass at least all of human activity and arguably all organic processes.
• This is in keeping with the pattern of analysis in environmental, ecological, and
science studies which, among other things, aim to identify processes at work in all
forms of life and to assess their differences and interrelationships (Haraway, 2003;
Meadowcroft, 2005; Rosewarne, 2002).
• Before political economy became a science, before it served as the intellectual
description for a system of production, distribution, and exchange,
• political economy meant the social
1. custom,
2. practice, and
3. knowledge
• about how to manage,
• first, the household, and
• later, the community.

• If economics is the study of the optimal use of scarce resources, political

economy
Political Economy: a) begins with the political nature of decision making and
A Branch of Social Science b) is concerned with how politics will affect economic choices in a
society.
• Political economy, branch of social science that studies the relationships
Politics
1. between individuals and society and
2. between markets and the state, • Politics is defined as the study of power and authority, and the exercise of
power and authority.
using a diverse set of tools and methods
drawn largely from • Power, in turn, means the ability of an individual (or Group) to achieve
outcomes which reflect his objectives.
a) economics,
b) political science, and • Similarly, authority ‘‘exists whenever one, several, or many people
explicitly or tacitly permit someone else to make decisions for them in some
c) sociology. category of acts’’

Economics
Lindblom defines politics as the struggle over authority. As he puts it ‘‘In an
A famous definition of economics is that of Lionel Robbins :
untidy process called politics, people who want authority struggle to get it while
‘‘Economics is the science which studies human behavior as a relationship
others try to control those who hold it.’’
between ends and scarce means that have alternative uses.’’
1. Politics is for authority
Economics is the study of the optimal use of scarce resources.
2. Struggle to get authority
9 3. Struggle to control the authority holders 10

Sociology
Why cannot politics and economics be seen in isolation?
1. Sociology is the study of human social relationships and institutions. Its
subject matter is diverse, ranging from crime to religion, from the family
• Economics is concerned with studying and influencing the economy. to the state, from the divisions of race and social class to the shared beliefs
• Politics is the theory and practice of influencing people through the exercise of of a common culture, and from social stability to radical change in whole
power, e.g. governments, elections and political parties. societies.
2. Unifying the study of these diverse subjects of study is sociology's purpose
• In theory, economics could be non-political. An ideal economist should ignore of understanding how human action and consciousness both shape and are
any political bias or prejudice to give neutral, unbiased information and shaped by surrounding cultural and social structures.
recommendations on how to improve the economic performance of a country.
• Elected politicians could then weigh up this economic information and decide.
In practice there is a strong relationship between economics and politics Subject matter of sociology
because the performance of the economy is one of the key political
battlegrounds.  Sociology is the study of human social relationships and institutions.
• Many economic issues are inherently political because they lend themselves to  Its subject matter is diverse, ranging
different opinions. 1. from crime to religion,
• Politics and economy , both are rooted in the society. 2. from the family to the state,
3. from the divisions of race and social class to the shared beliefs of a
common culture, and
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4. from social stability to radical change in whole societies. 12

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Purpose of sociology
 Unifying the study of these diverse subjects of study is sociology's purpose
of understanding
Four inquiries of PE
1. how human action and consciousness both shape and
2. are shaped by surrounding • It thus appears, that four inquiries are comprehended in this science.
a. cultural and 1. 1stly. What are the laws, which regulate the production of commodities:
b. social structures. 2. 2ndly. What are the laws, according to which the commodities, produced
by the labour of the community, are distributed:
3. 3rdly. What are the laws, according to which commodities are exchanged
Politics ,Economy & Society within the System of Political Economy
for one another:
4. 4thly. What are the laws, which regulate consumption.

Political Institutions Economic structures

and processes and processes

Social structure ,
processes & culture
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