The Problem With Neglecting Political Economy

One of the more frustrating things about contemporary economics, and of the left-tinged types like Matt Yglesias who are influenced by neoliberal economics, is the total neglect of political economy. There is a very, very old tradition linking the structure of the economy, and in particular the distribution of wealth, to the system of politics. In short, extreme distributions of wealth tend to result in extreme distributions of power, and hence oligarchic politics. This means that if you want to have a popular government, you need to pay very close attention to developments in the economy - which is why one of my earliest posts was on the importance of preserving small businesses and labor unions as bastions of stable democratic politics.

So I'm happy to see that Matt is at least willing to entertain the idea that there might be some problems with the domination of the economy by huge international corporations totally indifferent to the needs of human beings. Gee, Matt, do you think maybe the growing concentration of wealth and the assault of our quality of life might be linked somehow?