Page 43 - Global Political Economy_Understanding The International Economic Order

CHA PTER T WO
result of private groups’ efforts to employ public means to further
their own private interests rather than the result of selfless efforts to
advance the commonweal. Economic policy, this positon argues, is
the outcome of distributional politics and competition among power-
ful groups for private advantage. For example, the economics litera-
ture on trade protection (endogenous trade theory) exemplifies this
approach as it argues that tariffs and other obstructions to free trade
can best be understood as rent-seeking behavior by particular interest
groups.
A very different concept of political economy is used by those crit-
ics (especially Marxists) who believe that the discipline of economics
has become too formal, mathematical, and abstract. The study of eco-
nomics as the development of formal models, many charge, has be-
come largely irrelevant to the understanding and solving of real social
and economic problems. A major reason for this isolation of econom-
ics from the real world, they argue, is that economics neglects the
historical, political, and social settings in which economic behavior
takes place. As a consequence, some assert that economics, at least as
it is taught and practiced in traditional departments of economics,
has little relevance to the larger society and its needs.
Closely associated with this general criticism is what many critics
regard as the pretension of economics to be a “science” modeled on
physics and other natural sciences. Economics, they contend, cannot
be value-free, and economists should not pretend that it is. According
to Marxists and others, conventional economics reflects the values
and interests of the dominant groups of a capitalist society. Rather
than being value-free, economics is alleged to be infused with an im-
plicit conservative social and political bias that emphasizes market
and efficiency and neglects such social problems as inequality of in-
come and chronic unemployment. In the opinion of Robert Heil-
broner and William Milberg, contemporary economics is nothing but
a handmaiden of modern Western capitalism, and its primary pur-
pose is to make this troubled system work. 14
By the end of the twentieth century, the term “political economy”
had been given three broad and different meanings. For some schol-
ars, especially economists, political economy referred to the applica-
tion to all types of human behavior, including behaviors that would
not be classified by others as economic, of the methodology of formal
economics; that is, methodological individualism or the rational actor

14
Robert L. Heilbroner and William Milberg, The Crisis of Vision in Modern Eco-
nomic Thought (New York: Cambridge University Press, 1995).
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