It used to be called political economy

Thomas Palley has a piece on a debate hosted by Campaign for America's Future between EPI founder Jeff Faux and that Clintonite economic titan Gene Sperling. [transcript here]

Palley makes a distinction between what types of economists they both are: Faux is a "political economist" -- he "emphasizes politics in his analysis" -- while Sperling is a "policy economist" -- he "emphasizes policy." I have to declare my bias right here and say that I think Faux's kind of economics is the honest one. It sure seems like every decision that shapes a nation's economy begins in the political arena. Take the UAE ports flap -- it might seem purty obvious, but notice that the "free market" forces aren't really allowed to operate until the state says so. Once upon a time, political economy was the term for "economics," and rightly so. Economics as a word standing on its own, along with ideas of there being "pure policy" in my mind are a dead giveaway for someone who wants to de-emphasize this unfortunate reality that political choices predominate in economic policy, and would rather believe that one can think about the market as a free and "unfettered" independent entity. It requires some pretty colossal delusion to get there, but that's something we're all capable of. The political chapter in the ports saga is a moment for these policy economists to be either ignored, or considered vastly "inefficient."

I have a little parable from personal experience on this count. Before I worked on a political campaign, I always thought that the policy advisors rank pretty high on the totem pole. That they were the ones on the campaign setting the... policy. But on the presidential campaign I worked on -- Howard Dean's -- let me tell you, despite the big staff and multi-hour meetings, they didn't have any official policies on anything until either the pollster, political director or fundraisers told them what it would be. By the end of it, I started referring to that shop as "Policy." Not many people got my joke.

"Economics" are just part of the whole policy package, so they are most certainly subordinate to the political process. And if politicians in government aren't the ones making economic choices then what we have are businessmen making political ones -- and that's just the kind of situation that has "pro-growth" progressives in cubicles across DC licking the relish off their lips.

Note -- AlterNet staff writer Josh Holland reviewed Sperling's book, "The Pro-Growth progressive" back in January.

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