A political economy is a particular view of economics and ecology (at least) in the context of a human society (or more broadly a civilization). It must define, at least, what types or forms or styles of capital exist and how they relate via the media of financial capital (military fiat, commodity, credit, and scrip).
As it assumes and thus justifies a systematic valuation of different types of capital, the term itself is contested by various factions advocating different views of political science, of capitalism, and of socialism. It was coined by John Stuart Mill and employed by David Ricardo in an 1817 work - beginning a contest of "right" versus "left" views which continues to this day.
Current debates tend to focus on the central role of nature and persons, portrayed as natural capital and individual capital, which are active and alive. These are viewed to subordinate, control or alter the other forms of capital in predictable ways - as the natural consequence of being alive with a body in a natural ecology. Views of life processes and what constitutes "moral necessity" within them is a field of its own - theology. please do not add theology here'
A reasonably neutral modern definition of political economy is that it describes the way that financial capital mediates valuation of instructional capital, social capital, and infrastructural capital. It avoids the general complexity of political science by assuming that those styles of types of capital are defined by law, ethics, and customs that prevail in the economic civilization.
In those terms, socialist parties advocate for a higher valuation of social capital and a general theory of human capital, while capitalist parties advocate for a higher valuation of instructional capital and a general theory of intellectual capital. Each view subordinates individual capital and natural capital by definition, say critics, to some "progress" or "production" that is collectively and socially defined. Most libertarian parties thus advocate a totally liquid or free market or laissez-faire form of capitalism which permits trust, instructions, and infrastructure to find relative values in an open market of equal players. Critics of 'this' view hold that there is little equality between players due to historical inequities, e.g. colonialism, and that natural capital has no voice in systems that are defined wholly by human commodity and contract relationships.
Adding an axiom employed by many Greens that "economy is three fifths of ecology" - Mike Nickerson, emphasizes that the commodity natural resources and waste disposal services of an ecoregion are poorly represented on this left-right spectrum. Most green parties consider thus natural capital undervalued.
In addition, there is broad consensus in the anti-globalization movement that the political balance of power between the advocates of the views above has historically strongly favored citizens of developed versus developing countries. This is often referred to as the North-South debate or global development problem. Attempts to assign high valuations to scarce forms of capital in one country often lead to their arbitrage to another as natural resources or human resources, in this view, further impoverishing the developing nations that open up to global markets. Advocates disagree over the importance of debt relief, land reform, food security, etc., but they tend to agree that overall global biosecurity is reduced if there is no representation whatsoever for traditional customs or ecologies.
An example of this view is that of the Global Commons Institute, UK which critiques the IPCC analysis of global climate change, claiming that "the IPCC was persuaded to include the results of a global cost-benefit analysis in its report. In this analysis every possible damage that might result from global warming, including human lives, must be given a dollar value. These values are calculated on the basis of asking people's "willingness to pay" to avoid the risk that damage. People in rich countries, it was assumed, would be willing to pay 15 times more than people in poor countries. In other words, your right to live depends on your income. The same ratio was applied to non-human life in each country, i.e forests, biodiversity etc.."
This quote illustrates the basic conflict of any political economy: the individuals arguing for it have their own lives, loyalties and localities, and associated bias that prevent a neutral point of view from which to assess the economic development process. As views of law, science, ecology, economy, and civilization itself change, through what some call an evolution of societies, they "bubble up" to alter the framework called political science and perhaps also to alter the basic ethics of the civilization, e.g. as in the biodiversity debate and climate change debate.
Is there any global political economy that all cultures agree on? Some call the World Trade Organization the first serious attempt to find one, based on experiences with continental trading blocs. However, critics within the anti-globalization movement claim to prefer a more traditional fragmented national or bioregional democracy that would continue linguistic and political traditions of host societies.
It seems likely and necessary that safety, fairness and closure issues as discussed in political science must come to some consensus if a 15x gap in valuation of developed vs. developing world lives is to be ultimately closed. Historically, people whose individual lives or life-sustaining natural ecoregions were undervalued in a particular political economy have tended to revolt and disrupt governance systems. The mainstream critique of a rational political economy, as Thomas Homer-Dixon writes in his book The Ingenuity Gap, is that
"The challenges we face converge, intertwine, and often remain largely beyond our understanding. Most of us suspect that the "experts" don't really know what's going on and that as a species we've released forces that are neither managed nor manageable."
The radical critiques, of course, vary, and will continue to vary, as there is little agreement beyond some of the most basic of the terms above. Pending global agreement on terms in political science, ecology and economics, it seems that political parties contending to impose their views in a representative democracy are the way that political economy issues will be settled among we humans.
An extreme view is thus that political economy does not exist, that the above is entirely subjective, and political economy cannot in practice be separated from political science. If you believe that, please, leave this article alone, and write a terrific polisci intro that refutes this one out of existence. That is the wiki way...
External links:
Mill, contents, "The Principles of Political Economy"
Ricardo, contents, "The Principles of Political Economy and Taxation", 1817
"Reviving Local Economies", Wes Nickerson, 1996
Thomas Homer-Dixon, "The Ingenuity Gap"
IPEnet - International Political Economy network
Contributions to Political Economy