Political Economy as Theory of Society

Political economy is concerned with the material life of the polity. It historically developed by emphasizing the interdependencies between relevant economic units in the polity under consideration and/or the relationship between political (systemic) objectives and the means available to achieve those objectives.The intertwining of the instrumental and positive points of view has remained a feature of economic reasoning ever since. However, the two points of view entail a different emphasis on different features of the economy. This difference led Lionel Robbins to contrast the ‘materialist’ and the ‘scarcity’ definition of the subject matter of economics. The split between the ‘materialist’ and the ‘scarcity’ approach relates to the point of view adopted in addressing that issue. The scarcity approach considers the dispositional activity per se, independently of which specific objectives that activity should achieve (the ‘de gustibus non est disputandum ’ condition is central to that point of view). The materialist approach identifies a specific objective (how to achieve a self-sustaining economic system) and highlights the material requirements to fulfil that objective. In short, the scarcity approach presupposes but does not investigate material (structural) conditions, while the ‘materialist’ approach presupposes but does not investigate dispositional activity. This paper puts forward a view of political economy that brings together the attention for dispositional activity and for the structure of material conditions within the polity.