From the “Employment Act of 1946” 282 Martin Feldstein on the US Council of Economic Advisers 283 Commenting on this 288 Presentation for the National Press in Washington 1993 289 Clinton administration EITC plans for 2000 293 Summaries of additional papers 298 A note on the New Economy (2000) 299 On the 2005 edition of this book 300 Autobiographical note 303 What is new in this analysis ? 305 Abstract 306 Literature 311 Index 323 Book I Introduction 1. Order of presentation The basic idea of this book is that Keynes’s _General Theory_ is generalised even further by including endogenous government in the model so that we arrive at a truly general Political Economy. The argument can be presented in a top-down fashion, for example by repeating the IS-LM model before the amendments are introduced. This order appears to be uninviting and therefor the argument is presented in a bottom-up fashion. We better discuss the amendments before we look at the consequences for theory as a whole. We start with the new economic synthesis and the argument for the Economic Supreme Court, since these motivate the book. 2. The general theory Political Economy is the science of the management of the state. More in general, ‘economics’ is Greekish for ‘management theory’. [1] Marshall already explained that ‘economics’ is wider than ‘political economy’, see his “Principles of economics” (1947:43). The proper definitions are: · Economics ‘in a narrow sense’ puts the _approach_, methods and tools, of the discipline central, and looks at a variety of subjects. · Political Economy puts the _subject_, the management of the state, central. · Economics ‘in a broad sense’ joins the ‘narrow sense’ and Political Economy. One way to view these distinctions is to visualize a matrix with the sciences in the rows and the subjects in the columns. The common economist may to some extent neglect the inputs of the other disciplines, but the political economist must draw on the resources of philosophy, history, law, sociology, politicology, social psychology, biology, physics and so on. [2] Political Economy is, just by definition, the study that tries to integrate all human knowledge about the management of the state. Political Economy is, in that respect, the proper continuation of ancient philosophy on that subject matter. Confusions easily arise when these definitions are not understood. [3]