The origin of the term “Political Economy” dates back to the period when it was used to study the way production was carried out in countries born out of the new capitalist system. More specifically, it was the relation between the production system and law, customs and the government.
Theories of political economy were used to study the production, distribution and consumption of goods and services and their effective management in a country or a government system. In the 18th century, the term underwent a major change when the “Labour Theory of Value” came into being, brushing aside theories of the Physiocrats who claimed “Land” to be the source of all wealth.
Thus, the theory of profits on land which was up till now only a pattern of distributing wealth accrued from land in a capitalist system framework and collecting rents on land, changed, giving way to the theory of political economy. The word Political Economy is the coming together of two Greek words “polis”(city or state) and “oikonomos” (one who manages the household).
This explains the modern definition that political economy is the relationship between economics and politics in nation states or across different nation states. The theory of political economy now draws heavily on the subject of economics, political science, law, history and sociology or different closely related branches of economics to explain the politico-economic behaviour of a country.
Political economy, basically studies the development process of a polity, i.e. whether the polity is undergoing a surplus or a deficit. Political economy is also concerned with the study of human activity in shaping the material world and the mechanism of distributing the surplus or deficit generated from such activities. The disciplines that are related to the political economy are history, economics, law, human geography, ecology and international relations
In pioneering this radical reorientation of social research, Wallerstein advanced a theoretical and historical account of the origins, structure, and eventual demise of the modern world-system. Central to this account was the conceptualization of the Eurocentric world-system as a capitalist world-economy A world-system was defined as a spatio-temporal whole, whose spatial scope is coextensive with a division of labour among its constituent parts and whose temporal scope extends as long as the division of labour continually reproduces the “world” as a social whole.
A world-economy was defined as a world-system not encompassed by a single political entity. Similarly other proponent of this theory Amin’s scheme rests on three pillars: Fordism, Sovietism, and developmentalism. Fordism is the industrial theory prevalent in the centre: high wages are used to buy labour peace and levels of consumption sufficient to absorb the products of the steady growth of capitalism.
Military expenditures have played a big part in absorbing whatever overproduction might occur. Sovietism in Eastern Europe and the USSR also has rested on class compromise between the “bureaucratic bourgeoisie” and the working class. Catching up with the West was a major motivator in this compromise.
This effort is presented as defensive and justifiable. Developmentalism in the rest of the world (Asia, Africa, and Latin America) was at the heart of the Bandung project which grew out of the famous conference in Bandung, Indonesia in 1955. This conference was the beginning of efforts by comprador elements from the peripheral societies to modernise and industrialize their economies through state intervention.
Amin says that this project has failed along with the collapse of the global system in general, beginning with the failure of the Bretton Woods system in the early 1970s, and climaxing with the collapse of Sovietism in the early 1990s. Amin places economic development on a higher plane than political change, in that he describes a programme for development which has no explicit class roots and may thus still exist as a mode of development under capitalism.
His views on the importance of economics arise from some of the erroneous conceptions described above. They lead to a programme which has a very pronounced Utopian character to it; it seeks a recipe or technique for economic development as a solution to the problems of the less developed countries.
Amin makes little mention of the subject of the transition to socialism; or, rather, he has replaced the concept of the transition to socialism with his views on development. This is a reflection of the fact that the revolutions of the 20th century have been almost totally in the less developed countries, and the burdens imposed by their lack of industrial development tended to overwhelm the explicitly socialist tasks of the revolution, to the extent that the bourgeoisie could take advantage of this situation and use it to reassert and reestablish their power, both economically as well as politically.
The theorists of development, including such ‘Marxists’ as Samir Amin, are firmly located in the camp of bourgeois economic ideology and serve to divert the genuine revolutionaries from taking up the question of the transition to socialism and clearing out the muck of decades of revisionist and reformist obfuscation.
They also do not provide any answer to the question of why these revolutions failed; was it merely due to betrayals by the leadership and their revisionist concepts, or do the backward economic conditions in these countries mean that the material basis for socialism was absent to begin with? Amin’s economic mistakes justify larger political mistakes throughout his whole career as a bureaucrat and economic theorist in the service of “Third World” bourgeois governments who strike a socialist pose.
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