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Political economics

By Levi Clancy for Student Reader on

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Politics is the struggle over the allocation of benefits and privileges.

Laswell (1936) defines politics as who gets what, when, how. Government is the institution responsible for resolving conflicts over the allocation of benefits and privileges. According to Hobbes, life in a state of nature (without any government) is nasty, brutish and short. Hobbes' perception is built on the assumption that men are selfish and predatory. Government rescues man from the state of nature.

Government is defined as the authorized use of force. Force is used to limit freedom of choice.

These limitations provide society with order, stability and predictability. Individuals voluntarily surrender their freedom in exchange for order, thus escaping the state of nature. How much order should a government provide? How much freedom should individuals relinquish? Freedoms lost must be outweighed by freedoms gained.

In addition to using force, governments provide public goods as a means of ensuring order. Order is the solution to societal chaos.

For example, infrastructure such as sanitation and transportation maintains stability. Lastly, governments promote equality to ensure order -- for example, bridging the gap between rich and poor by various means.

Economics vs political economics

Economics analyzes how material goods (resources) and human capital (services) are made, distributed and consumed. Its agent is the economic man which is a purely rational being. However, this is a poor model for reality. Political economics (political economy) not only studies the economy, but discards the economic man to look at society, policy and the economy. Thus, political economics provides a broader view that incorporates economics' mathematical tools with an awareness of the polity, and the knowledge that no economy is a closed, rational system; no economy is a tightly controlled experiment chamber.

To truly study and understand how an economy works, one must also try to understand the intentions and repercussions of decisionmaking that shapes the economy.


Aggregate demandThe total demand for goods and services in the economy. Garfinkle asserts that this is the driving force of the economy; and in times of recession, that people's diminished aggregate demand can be supplemented by government spending (at a deficit, to avoid extracting more money from the citizenry and thus having aggregate demand go in one door and out the other as Garfinkle describes Great Depression taxation policies).
ResourcesThings that have value.
American RevolutionThe United States' transition from colony to state.
De-politicizationLoss of interest, leading to de-participation.
EconomyA society for production and distribution of wealth. From oikonomia, the Greek term for the household unit.
HealthSound mind and sound body.
Invisible handCoined by Adam Smith to describe how his ideal economy and government is self-correcting, self-balancing and reaps maximal rewards for both individuals (including, unusual for Smith's time, the working classes) and the whole nation. The ideal system is guided by the invisible hand of competition directing each profit seeker to promote the general welfare, despite that outcome not being the individual's intention.
Laissez-faireAn economic system with no government role, except to offer police, judicial and military protection for property and life.
LiberalismLiberty (is personal, individual, separation from a controller, personal release from feudal abuse of power), freedom, welfare (well-being, ability to meet one's needs and wants such as food, water, shelter, clothing, education and health care).
LibertyLiberty has positive/affirmative and negative branches. Negative liberty is more individualist/laissez-faire, and is a release; and positive liberty is more unitarian and communal..
ManipulationWhen somebody leads/deceives another person into believing something untrue.
Natural LibertySmith's vision of natural liberty is a mixed economy with private invention, innovation and imitation all promoted by public institutions; the working class is the principal beneficiary.
PolisSharing/caring community, polity, city-state
PoliticsPolitics has five arms: deciding who gets what, when, how; distribution of resources; allocation of resources; resolution of conflicts; Getting/obtaining and using power.
PowerAbility/capacity to compel action.
Social DarwinismLaissez-faire capitalism and Social Darwinism are tightly linked. The latter states that in a laissez-faire system, society will stratify with the wealthiest citizenry offering the most valuable resources; the poorest citizenry will be those offering the least valuable resources; and the only barrier between the wealthiest and the poorest will be ability.
SocietyA system for production and distribution of wealth for the welfare of the people.
SystemA number of components (elements, units) working together in a symbiotic (give and take) relationship.
ValueSomething that you need.
VirtueCapacity to be good
WealthMaterial things or intangible things (knowledge, human resources, human capital).
WelfareWhen we think of welfare, we think of a $300 check.
Freedom from
Freedom of
National sovereignty
Public good
Police power
Political equality
Social equality
Equality of opportunity
Equality of outcome
Political ideology
Democratic socialism
Laissez faire
Procedural Democracy
universal participation
political equality
majority rule
participatory democracy
representative democracy
substantive democracy
minority rights
majoritarian democracy
interest group
Pluralist Democracy
elite theory
Elastic Clause:
Commerce Clause:
Categorical Grant:
Formula Grant:
Project Grant:
Block Grant:
Policy Entrepreneur:
Municipal Government:
County Government:
School District:
Special District:
Home Rule:
Public Opinion:
Skewed Distribution:
Bimodal Distribution:
Normal Distribution:
Stable Distribution:
Political Socialization:
Socioeconomic Status:
Self-Interest Principle: