The Political Economy is a complex term that is challenging to define clearly. The term politics rooted in the definition, “of, for, or relating to citizens” whereas the term economy is rooted in “household management”. Today this term is defined as the study of production and trade in relations with customs, government, and distribution of national income and wealth. Philosopher John Ruskin’s theory on the origins of political economy is utilized to further our understanding in addition to Karl Marx’s input on this matter.
John Ruskin believed the political economy was a theoretical response to the vast expansion of manufacturing industry in the late eighteenth century and the consequent rise to power of middle-class entrepreneurs. The subsequent product is the oppression of the working class. One that is caused by the division of labor proposed by philosopher Adam Smith.
Karl Marx takes this concept further by highlighting specific weaknesses in the political economy. For one, it does not factor in the labor that is exerted by the laborer, instead it considers only the capitalist’s labor production needs. This system does not explicitly define the value of labor, of capital, and the connection between capital and land.
“Political economy throws no light on the cause of the division between labor and capital, and between capital and land. When, for example, it defines the relationship of wages to profit, it takes the interest of the capitalists to be the ultimate cause, i.e., it takes for granted what it is supposed to explain.”
Secondly, it does not predict the evolution of ideal situations turning harmful. Performing self-actualizing work such as crafting arts will eventually lead to patrons or interested consumers. The artist then becomes a businessperson due to their product’s success. Eventually, he or she will expand their business and prey on smaller ventures. Competition was fair at first, but then it grows into a monopoly. This is all driven by greed in wanting more from our products and to want even more from labor.
“Precisely because political economy does not grasp the way the movement is connected, it was possible to oppose, for instance, the doctrine of competition to the doctrine of monopoly, the doctrine of the freedom of the crafts to the doctrine of the guild, the doctrine of the division of landed property to the doctrine of the big estate – for competition, freedom of the crafts and the division of landed property were explained and comprehended only as accidental, premeditated and violent consequences of monopoly, of the guild system, and of feudal property, not as their necessary, inevitable and natural consequences.”