Intro to the Study of Political Economy

1. Intro to the Study of Political Economy September 17

2. Overview of Lecture • Resources for students • Economics/Politics/Political Economy? • Thinking about capitalism • What is a good (or successful) economy?

3. Scott Library Workshops Undergraduate Research Seminars Covers library policies, finding books using the library catalogue, finding scholarly articles using online databases. • Thursday, September 21, 1:00-2:30 pm • Friday, September 25, 11:00-12:30 pm • Wednesday, September 30, 6:00-7:30 pm • Wednesday, October 7, 2:00-3:30 pm • Wednesday, October 14, 2:00-3:30 pm • Wednesday, October 15, 10:00-11:30 am

4. Academic Support Services • Learning Skills Services: provides help with academic writing, critical thinking, reading and note-taking, study secrets, time management, etc. • Centre for Academic Writing: offers individual tutoring, workshops and resources for undergrads to help them develop their academic writing skills. Includes assistance for ESL students.

5. Economics for Everyone Website • www.economicsforeveryone.com • Glossary

6. Canadian Encyclopedia online • Political Economy by James Laxer • Economics by Paul Davenport • Economics, Radical by Cy Gonick • The State by Leo Panitch • Politics by Garth Stevenson • Political Science by Reg Whitaker

7. Economics for Everyone by Jim Stanford • “If there’s a simple, overarching theme running through this book, it’s the idea that people have to fight for whatever they get from the economy” (Stanford, 2008: 12).

8. Economics for Everyone • Stanford: “I believe that studying economic history and the history of economic thought is an inherently subversive undertaking. It refutes the assumption that capitalism is ‘natural’ and hence ever-lasting, and the related claim that economics is the neutral, technical study of that natural, ever-lasting economy” (2008: 9).

9. Economics/Politics? • “economics is simply about how we work…Economics is about who does what, who gets what, and what they do with it” (Stanford, 2008: 1). • This echoes a famous definition of politics by political scientist Harold Lasswell. He stated that “politics is who gets what, when and how.”

10. A Broad Conception of Economics • Along with markets and exchange, “Economics also involves studying many other things: history, technology, tradition, family, power, and conflict” (Stanford, 2008: 24).

11. Economics is a social subject • “because we interact, cooperate, and clash with each other in the economy…economics is a social subject” (Stanford, 2008: 1).

12. Economics is about politics & power • “debates over economic issues are not technical debates…They are deeply political debates, in the broad sense of that word: distinct groups of people have distinct interests, they know their interests, and they naturally work to promote them” (Stanford, 2008: 3).

13. What is political economy? • At the most basic level, it is the intersection of politics and economics. • The state and other political actors play a role in shaping the economy. • In turn, the outcomes of the economic system have broadly political ramifications.

14. Political Economy as a discipline • “the first economists called their discipline ‘political economy’” (Stanford, 2008: 24). • Adam Smith, David Ricardo, Thomas Malthus, John Stuart Mill were all students of political economy • Karl Marx provided a “critique of political economy”, but is often considered to be one of the classical political economists

15. Political Economy as a discipline in Canada • Strong history of political economy as a discipline. • The Canadian Journal of Economics and Political Science was published from 1935-1967. Then it basically split into the Canadian Journal of Political Science and the Canadian Journal of Economics. • The University of Toronto had a department of political economy up until 1982. It was not until then that it split into the separate disciplines of political science and economics. • Studies in Political Economy has been published since 1979.

16. Economics as a “Science”? • “Economics is a social science, not a physical science” (Stanford, 2008: 23). What does that mean?

17. Economics and Normative Questions • “Economics is not a neutral, technical discipline” (Stanford, 2008: 4). • Stanford: “economists of all stripes carry political baggage. I certainly do.” (2008: 8). • Stanford: “most economic theories over the years have been motivated by political considerations. Modern economics (including this book!) is no different: economics is still a deeply political profession” (2008: 25). • “Most economists…like to pretend that their profession is ‘scientific’ and hence value-free, but this is a charade” (Stanford: 2008: 29).

18. Capitalism • Capitalism is a particular form of economy. • It developed historically in particular parts of the world and have spread elsewhere. • Certainly capitalism covers the world today. • Stanford suggests that other kinds of economies are likely to emerge in the future of humanity (2008: 5).

19. What is specific to capitalism? • “Most people have to work for others, in return for a wage or salary” • “A small proportion of society owns the bulk of wealth, and uses that wealth in an effort to generate still more wealth” • “Competition between companies, each trying to maximize its own profits” (Stanford, 2008: 5).

20. Characteristics of Capitalism Capitalism is • “dynamic: flexible, creative, always changing” • “conflictual: with ongoing struggles and conflicts between different groups of people” • “unstable: exhibiting periods of growth and prosperity followed by periods of stagnation and recession” (Stanford, 2008: 7-8)

21. What is a good (or successful) economy? How do you define a successful economy? How do you measure success?

22. Gross Domestic Product • GDP is a very common measure, regularly cited in the mass media. • Refers to the dollar value of all goods and services produced in an economy. • Nominal GDP or Real GDP • GDP/capita

23. Limits of GDP as a measure • Ignores unpaid work (disproportionally performed by women) • Does not differentiate between different forms of economic activity or take into account any negative impacts of economic activity (such as environmental degradation) • Ignores the distribution of economic activity and income

24. Measuring Economic Success • Joseph Stiglitz, “Lies, damned lies and GDP Statistics,” Toronto Star. September 13, 2009. • Martin Regg Cohn, “How to measure Gross National Happiness,” Toronto Star. September 15, 2009. • Commission on the Measurement of Economic Performance and Social Progress • National Post editorial board, “The Quantification of Happiness,” National Post. September 16, 2009. • The Canadian Index of Wellbeing

25. 1 Iceland 2 Norway 3 Canada 4 Australia 5 Ireland 6 Netherlands 7 Sweden 8 Japan 9 Luxembourg 10 Switzerland 2008 Report (2006 data) UN Human Development Index http://hdr.undp.org/en/statistics/

26. Other UN indices Gender Related Development Index (GDI) Canada ranks 4th Gender Empowerment Measure Canada ranks 11th Human Poverty Index (2007-08 report) Canada ranks 8th