[...]... and here is where a text on political economy differs most from other economics texts – a text on political economy emphasizes the mutual dependence of economics and politics, how the virtues of a competitive economy are conditional on other institutions in society and how economic organization may foster or corrode democratic government Perennial questions of political economy are discussed: How can... text on political economy would be expected to raise these questions, even if no definitive answers can be supplied PRE F ACE xv Political economy is the original name for economics, abandoned a hundred years ago for the simpler term “economics” because the content of the subject had narrowed The word economy is derived from a Greek word meaning “the management of the household.” Political economy. .. connected with the organization of the economy Nowadays, the term political economy may refer either to a sub-field of economics about overlaps with politics and law or to the entire field of economics broadened to include the overlaps with politics and law Political economy may be an increment or an expansion In this book, it is an expansion; it is economics with a political slant The study of how markets... to bio-chemistry Whether it is useful to recognize something called political economy is in the end a question of how best to develop the student’s understanding of society A course in political economy may be a good beginning for the study of economics and a way to whet the student’s appetite for economics more narrowly defined Whether he begins with conventional economics or with political economy. .. expenditure The productivity of do-it-yourself activities The high-wage tax payer’s response to taxation The middle-wage tax payer’s response to taxation The low-wage tax payer’s response to taxation The impact on voters of the redistribution of income in a community with three voters where taxable income may shrink in response to taxation The structure of preferences A left-right continuum A world of extremists... me with a pleasant and challenging environment for research and writing The Social Science Research Council of Canada provided financial support Political Economy Dan Usher Copyright © 2003 by Dan Usher Chapter On e HOW DREADFUL LIFE USED TO BE Political Economy or Economics is a study of mankind in the ordinary business of life: it examines that part of individual and social action which is most closely... for university students As the name political economy suggests, the book differs from other introductory texts in emphasizing connections between the organization of the economy and the conduct of government, but, like every other introductory text, its primary focus is upon the calculus of self-interest in the everyday business of life and upon the workings of the economy itself The book is intended... introductory texts in the sciences As the text for a full-year introductory lecture course, it should be comprehensible enough The book would also serve as a text for a second-year course in political economy narrowly defined, with emphasis on the economics of voting, public administration, and law The chapters on markets and the competitive economy would then constitute a review of essential background... call economics and what we now call political science would be studied under the heading of political economy in the same department of the university Over the last fifty years or so, the unified departments split into individual departments of economics and political science, as each subject acquired a separate domain of investigation and a distinct style of analysis The economy came to be studied entirely... about how people bargain and about how associations – corporations, trade unions, and political parties – supplement or circumvent markets when direct bargaining is prohibitively costly The world’s work is facilitated by a combination of price-taking and deal-making The clean implications of pricetaking in the simple economy discussed in the earlier chapters require considerable modification once bargaining . Cataloging-in-Publication Data Usher, Dan 193 4- Political economy/ Dan Usher. p. cm. Includes bibliographical references and index. ISBN 0-6 3 1-2 333 3-4 (alk. paper) – ISBN 0-6 3 1-2 333 4-2 (pbk.:.