26 May 2017

Uganda: The Political Economy of Take-Off (Part I)

analysis

The message of 'take-off' has been repeated several times by President Museveni.

But what is the essence of take-off? Where have we come from, and where are we going - in regard to take-off? In our continuing engagement with young people and members of the intelligentsia - about our past, present and future - these questions keep coming up. We shall focus on the idea of take-off over the next two weeks.

Along the way, we shall introduce the category or concept of political economy because this is critical in helping us appreciate the interplay of politics and economics under which take-off occurs. We shall also unpack the category and concept 'national question' which defines, in large part, the strategic bottlenecks to our development, and the overall national historical tasks that must be discharged of necessity.

Political economy is the interdisciplinary 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.

The term political economy is derived from the Greek words polis, meaning city or state, and oikonomos, meaning 'one who manages a household or estate'.

Political economy, thus, can be understood as the study of how a country - the public's household - is managed or governed, taking into account both political and economic factors.

While political economy is a relatively young academic discipline, it remains a very old subject of intellectual inquiry which can be traced to philosophers of old such as Plato and Aristotle, etc. In more contemporary terms, there was qualitative development of political economy between the 16th and the 18th century, with the appearance of the mercantilist school, which called for a strong role for the state in economic regulation.

The work of Scottish economist Sir James Stuart, Inquiry into the Principles of Political Economy" (1767), is considered the first systematic work in English on Economics.

It, however, emerged as a distinct field of study in the mid-18th century, largely as a reaction to mercantilism, when the philosophers Adam Smith (1723 - 1790) and David Hume (1711- 1776) and French economist François Quesnay (1694 - 1774) began to approach this study in a systematic manner.

These took a new approach, refusing to explain the distribution of wealth and power purely in terms of God's will and, instead, appealed to political, economic, technological, natural, and social factors and the complex interactions between them.

It was influenced by the individualist orientation of the English political philosophers Thomas Hobbes (1588-1679) and John Locke (1632-1704), the realpolitik of the Italian political theorist Niccolo Machiavelli (1469-1527), and the inductive method of scientific reasoning invented by English philosopher Francis Bacon (1561 - 1626).

Many works by political economists in the 18th century emphasized the role of individuals over that of the state and generally attacked mercantilism. This is perhaps best illustrated by Smith's famous notion of the 'invisible hand' in which he argued that state policies often were less effective in advancing social welfare than were the self-interested acts of individuals.

Individuals intend to advance only their own welfare, Smith asserted, but in so doing they also advance the interests of society as if they were guided by an invisible hand. In the 19th century, English political economist David Ricardo (1772-1823) further developed Smith's ideas.

The holistic study of political economy that characterized the works of Smith, Georg List, Karl Marx, and others of their time was gradually eclipsed in the late 19th century by a group of more narrowly focused and methodologically conventional disciplines, each of which sought to throw light on particular elements of society, inevitably at the expense of a broader view of social interactions.

By 1890, when English neoclassical economist Alfred Marshall (1842-1924) published his textbook Principles of Economics, political economy as a distinct academic field had been essentially replaced in universities by the separate disciplines of economics, sociology, political science, and international relations.

The phenomenal work of John Maynard Keynes (1883-1946) who challenged the foundations of the idea of "the free-market" and that of Milton Friedman and other monetarists in the 1970s have been important nodal points in the development of political economy.

Today, political economy encompasses several areas of study, including the politics of economic relations, domestic political and economic issues, the comparative study of political and economic systems, and international political economy.

The emergence of international political economy marked the return of political economy to its roots - as a holistic study of individuals, states, markets, and society. Next week, we look at the essence of Marxist political economy.

The author is private secretary for Political Affairs, State House.

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