July, 2016

The Peculiar Business of Politics

  • Richard Wagner

    Distinguished Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics
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Find the working paper at SSRN.

This essay stems from Jim Dorn’s invitation to encapsulate my recent book, Politics as a Peculiar Business: Insights from a Theory of Entangled Political Economy (Cheltenham, UK: Edward Elgar, 2016). Where standard political economy treats states as singular entities that intervene into economies, I treat states as networks of peculiar enterprises that operate inside a society’s market arrangements. This peculiar quality ramifies throughout a society. To be successful, political enterprises must raise sufficient revenue to return profits to investors. Those profits are disguised through indirect transactions and ideological formulations, but are profits all the same. There is thus a simple explanation for why political enterprises grow relative to commercial enterprises: they grow because they offer higher returns to relevant investors than what those investors could obtain through commercial enterprises. The analytical challenge a theory of entangled political economy must face is to explain the profit-seeking reality of the sub-system of political enterprises that operates inside a society. This essay sets forth the main analytical features of this alternative scheme of political economy, and closes by considering possible implications for efforts to limit the reach of the political within society.