Political economy

Political economy is a branch of political science and economics studying economic systems (e.g. markets and national economies) and their governance by political systems (e.g. law, institutions, and government).[1][2][3][4] Widely studied phenomena within the discipline are systems such as labour markets and financial markets, as well as phenomena such as growth, distribution, inequality, and trade, and how these are shaped by institutions, laws, and government policy. Originating in the 16th century, it is the precursor to the modern discipline of economics.[5][6] Political economy in its modern form is considered an interdisciplinary field, drawing on theory from both political science and modern economics.[4]

Jean-Jacques Rousseau, Discours sur l'oeconomie politique, 1758

Political economy originated within 16th century western moral philosophy, with theoretical works exploring the administration of states' wealth; "political" signifying the Greek word polity and "economy" signifying the Greek word οἰκονομία; household management. The earliest works of political economy are usually attributed to the British scholars Adam Smith, Thomas Malthus, and David Ricardo, although they were preceded by the work of the French physiocrats, such as François Quesnay (1694–1774) and Anne-Robert-Jacques Turgot (1727–1781).[7]

In the late 19th century, the term "economics" gradually began to replace the term "political economy" with the rise of mathematical modeling coinciding with the publication of an influential textbook by Alfred Marshall in 1890.[8] Earlier, William Stanley Jevons, a proponent of mathematical methods applied to the subject, advocated economics for brevity and with the hope of the term becoming "the recognised name of a science".[9][10] Citation measurement metrics from Google Ngram Viewer indicate that use of the term "economics" began to overshadow "political economy" around roughly 1910, becoming the preferred term for the discipline by 1920.[11] According to economist Clara Mattei, this shift was driven by the increasing consensus of classical liberalism as natural-law; and persisted despite evidence to the contrary during the First World War.[12] Today, the term "economics" usually refers to the narrow study of the economy absent other political and social considerations while the term "political economy" represents a distinct and competing approach.

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