MODULE 1 THE BASICS OF POLITICAL ECONOMY

INTRODUCTION
This module will examine the fundamentals of political economy. It examines the
overall nature of the connection between the fields of economics and politics which is
the central theme of this study. However, it will explore the varying perspectives from
which political economy is studied to understand the theoretical constructs behind
those views. The module will also examine the subject matter of political economy,
the various theoretical perspectives underpinning the study, and the basic concepts
prominent in the field. The examination of these fundamentals will no doubt enhance
the understanding of the core concerns of the subject of political economy. This
module is made up of five units, the framework upon which we would base our
further discussions of the basics of political economy.
Unit 1 Understanding the Subject Matter of Political Economy
Unit 2 Evolution and Scope of Political Economy
Unit 3 Perspectives on Political Economy
Unit 4 Basic Concepts in Political Economy
Unit 5 Primitive Accumulation of Capital

UNIT 1 UNDERSTANDING THE SUBJECT MATTER OF POLITICAL

ECONOMY
1.0 INTRODUCTION
The major concern of this unit is to introduce the student to the discipline of political
economy. It examines the meaning and significance as well as the subject matter of
political economy. This is because an understanding of the subject matter is important
to understand what the entire course is all about.
2.0 OBJECTIVES
By the end of this unit, you will be able to:
 define political economy
 discuss on the rationale for the course.
3.0 MAIN CONTENT
3.1 Meaning of Political Economy
The term political economy is a combination of two terms ‘political’ and ‘economy’.
According to Frieden, Lake and Broz (2017:1), “the economy can be defined as the
system of producing, distributing, and using wealth; politics is the struggle between
actors with divergent interests to make collective decisions, whether inside or outside
of formal governments.” Political economy has a variety of meanings. For some, it
refers primarily to the study of the political basis of economic actions-the ways that
government policies affect market operations. For others, the principal preoccupation
is the economic basis of political action-the ways that economic forces mould
government policies (Frieden, et al, 2017:1). In reality, politics and markets are in a
constant state of mutual interaction. Political economy also centers on the production
of material wealth and the mode of production, that is, it studies production and the
basis of society from the economic relations between people in the production
process. It is the study of production and trade and their relations with law, custom
and government; and with the distribution of national income and wealth. It also
refers to the branch of social science that studies the relationships between individuals
and society and between markets and the state, using a diverse set of tools and
methods drawn largely from economics, political science, and sociology. In the views
of Lenin, political economy deals not just with production, but the social relations of
men in production and the social system of production.

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The subject-matter of political economy is, therefore, the production (economic)
relations between people, the relationship of various social classes to political power
and the interplay of politics and economy in the determination of power relations
within the comity of nations. These
include:
i. The forms of ownership of the means of production;
ii. The position of the various classes and social groups in the production and their
interrelations;
iii. The forms and socio-political implications of the distribution of material wealth;
and
iv. The interplay of politics and economy in the international division of labour and
exchange.

From this, it is obvious that political economy is the science of the development of
social production, that is, economic relations between people. It clarifies the laws
governing production, distribution, exchange, and consumption of the material wealth
in human society at various stages of its development. The political economy
therefore takes into account the relationship between the productive forces and
relations of production.
Similarly, political economy is a class, partisan science dealing with aspects of the
economic interrelations between individuals, social classes or nations with specific
focus on the vital aspects of production, distribution, and consumption of wealth. It is
a historical science, which shows how society develops from lower to higher stages
and how the entire course of historical development prepares the objective necessity
of the triumph of the communist mode of production (Ryndina, Chernikov and
Khudohormov, 1980).
Over the years, intellectual curiosity has emerged on issues like the inevitability or
otherwise of class struggles. Similarly, competing explanations have emerged on the
causes of third world dependency as well as the actual role of Multinational
Corporations or International Financial Institutions in the functioning of the global
and national economies. These and more are some of the issues that bother the
political economist. It is interesting to note that answers to these questions have over
the centuries, provoked intellectual confrontations between scholars of various
ideological leanings.
For instance, political economists of the Marxian tradition, argue that bourgeois
economists were able to analyse reality more or less objectively while the bourgeoisie
was still a rising class, and the development of capitalism was in the interest of social
development. However, with the emergence of the working-class consciousness as a
counter orientation to continued exploitation of labour, bourgeois orientations and
domination have steadily been called to question. The apparent clash of ideologies has
led to the evolution of a truly scientific basis for political economy through the works
of such scholars like Marx, Engel, and Lenin.
These scholars applied the method of dialectical and historical materialism which
presupposes:-
i. Investigation of relations associated with material production and the process of
their emergence and development across epochs, that is, historical;
ii. Consideration of this process as an objective reality, that is, materialistic;
iii. Revelation of the internal contradictions of development inherent in social
production, that is,
dialectical (Ryndina et al, 1980).

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Having established the meaning of political economy, it is now imperative to outline
the significance of the course. In line with this, radical scholars maintain that the
course provides the working class and all working people with knowledge of the laws
governing the economic development of society and allows them to fulfill
successfully the task facing them. It also shows the working people of all nations the
reasons for their enslavement, poverty, and deprivations. Specifically, it shows that
the oppression and impoverishment of the working class and all the working people
depend on the arbitrary will of individual capitalist.
Political economy therefore seeks to explain the dynamics of the state – market nexus
causes of the asymmetrical relations between developed and developing nations in the
international division of labour and exchange. It locates the root causes of third world
underdevelopment on issues of imperialism, colonialism, and neocolonialism on the
one hand and also draws from the internal contradictions peculiar to the third world
countries as fundamental causes of their underdevelopment. Interestingly, both
bourgeois and Marxian political economy proffer separate approaches to
emancipation and development. Finally, knowledge of political economy helps the
oppressed and exploited to understand their reality and ways out of their
contradictions.

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