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Research Group on Political Economy at the institute for political science Philipps-University Marburg

General Outlook

The research group is concerned with the analysis of the political economy of capitalism understood as the mutual interrelation between the economic and the political system which is typical of capitalist societies. These mutual interrelations work in two ways: On the one hand, the momentum of production and allocation in the economic system fundamentally influences the development of society including options of political action; on the other, various collective actors try to influence in political ways the economic system as a whole and especially the outcome of the economic allocation process. Economic development therefore leads to social development, generating political interests which, under certain circumstances, become economic policy. The starting point of our analysis is specifically the conviction that the functional logic and the institutional arrangement of economic systems are always the consequence of political processes: in this sense, the economic system itself possesses no "pre-social" logic.

Linked to this is the rejection of the notion of economic efficiency, in the sense of Pareto, as the ultima ratio of economic analysis: the object is to reach a more realistic view of the political economy of capitalism. Mainstream economics still derives policy proposals from this notion of efficiency, rejecting political intervention into the economic system as economically inefficient. Because of the lack of reflection on what norms are incorporated in the concept of economic efficiency, the policy options which derive from it are questionable for two reasons. First, it has to be pointed out that policy recommendations based on this concept have no claim to any kind of pre-political objectivity. Second, such policy recommendations will merely remain on paper if there are no interested collective actors to take them up. But if the role of relevant and specific interests is not taken into consideration, the economic policy measures adopted will be accidental and therefore incapable of being decisive and consistent.

The so-called New Political Economy tries to bring political action back into economic theory. Introducing political actors into the theory of economic policy is definitely an element of progress, even if political action is still conceived quite simply with most models still relying on the notion of economic efficiency.

The work of the research group deals with political economy, that is, in a broad sense, the interrelation between political and economic action. This means, therefore, not only the use of economic rationality in the analysis in general of political action or even specifically in that of limited political intervention in the economic system. Political economy understood as interrelation between the economic and the political system is rather seen as organisational principle of capitalist societies in several aspects:

1. Economic action always takes place in specific social situations, that is within a particular institutional framework. Consequently, the market, considered to be the main coordinating principle of capitalism, is also a specific structure with specific characteristics which need to be defined.
2. Economic processes of production and allocation always have repercussions on the structure and organisation of society and therefore on the formation of interests relevant for policy. At the same time, the working out of these interests leads to changes in the distribution of resources and therefore in the situation of the economic protagonists themselves.
3. The placing of economic efficiency above the interests of political forces is a normative decision. In our opinion for the analysis of political economy it is more useful to start from clear and concrete political goals (for example full employment), which are articulated by political actors. For this reason, the role of such political forces cannot be left out when studying the dynamics of economic and social development.

In the analysis of these and other aspects of the political economy of capitalism, the research group utilizes two methodological approaches: The first is class and distribution theory with regard to the economic dynamics and social development which derive from a specific distribution of what society produces. Second, a theory of rational action is applied with regard to institutions in order to study the emergence and transformation of the political regulation of economics. These approaches represent the two classical methodological bases of political economy in economic science. Along with specific studies of the political economy of primarily modern capitalist societies, the research group will also touch upon aspects of the history and methodology of this discipline as well as its relevance for public policy.