ABSTRACT
The problematic of political economy predates (neo-classical) economics, which is best understood, not as a branch, or offshoot of political economy, but as a rival problematic. Political economy takes it for granted that economics and politics are necessarily interrelated, that to understand questions concerning the allocation and distribution of material resources, it is necessary to understand questions of power, that economic structures and outcomes are based on political relations and vice-versa. Early classical political economists, such as Adam Smith and David Ricardo, while interested in the possibility of maximising material outputs for any given inputs, were aware of the social and political dynamics of their discourse. Both understood capitalism as a social process. It was Smith who formulated ‘the iron law of wages’ while Ricardo posed the possibility of class antagonisms based on the distribution of value between profits and wages. In the mid-nineteenth century, however, neo-classical economists, while spiriting away any investigation into such philosophical questions as the origin and meaning of ‘value’ by setting up an enquiry into how prices were determined, also dropped considerations of social formations, classes, i.e. power, from its totality of explanatory ideas and concepts as the politically anodine ‘laws’ of demand and supply took over.
