Definition & Reality in the General Theory of Political EconomyCool, Thomas (Thomas Herman Anthonius Maria)
Science
Definition & Reality in the General Theory of Political Economy
Cool, Thomas (Thomas Herman Anthonius Maria)
Economics; Political science
One example is Keynes. As an economist, Keynes emphasised the economic
content of his analysis: notably his findings on the peculiar role of
money in the economy. His observation is firstly that money is both a
medium of exchange and a store of value, and secondly that storage
value depends upon expected value: and then his analysis on
expectations takes off. In retrospect the force of Keynes’s analysis is
a bit less ‘economics’ than he thought, and has more to do with the
handling of time than with money per se. Samuelson (1947, 1983:117) and
Grandmont (1983) showed that the analysis can be reproduced if money is
entered in the utility functions. What remains is the issue of time.
From a methodological point of view, Keynes’s theory is general in that
it extends economic equilibrium with the notion that market
non-clearing _disequilibrium _such as unemployment could be a state of
expectational _equilibrium _too (a different concept of equilibrium).
And money need not be the only cause, witness for example the
difficulty of forecasting sales in order to set production.
[10]
[11]
[12]
Another example of the relevance of methodology appears to be Samuelson
(1947). Samuelson emphasises his interest in a general theory (that
word again) of economic theories, and clarifies that such a theory (i)
should apply to various circumstances and (ii) be meaningful (as
opposed to being a tautology). Samuelson clearly presents his argument
as a methodological one. [13]
Originally, the draft of this book started out with methodology, but
this discussion now has been moved downwards, to a place where one will
better appreciate its argument and the need for it.
Book II
Trias Politica and Economic Supreme Court
4. The Trias Politica
Montesquieu published his _De l’Esprit des Lois_ in 1748. An English
translation can be found on the internet, and a short biographical
note, taken from there, has been included in an appendix. Though his
book discusses many issues, it remained famous for the theory of the
separation of powers, i.e. of the Legislative, Executive and Judicial
branches of government. The American phrase is ‘checks and balances’. A
key passage in Book XI shows that Montesquieu also refers to the
existing case of England - so that his role is not one of originator
but one of keen observer and developer of theory:
“One nation there is also in the world that has for the direct end of
its constitution political liberty. We shall presently examine the
principles on which this liberty is founded; if they are sound, liberty
will appear in its highest perfection.
To discover political liberty in a constitution, no great labour is
requisite. If we are capable of seeing it where it exists, it is soon
found, and we need not go far in search of it.
Public-domain text, read in full here on John Shaqi.
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