ABSTRACT
Modern political economy has four component parts: defining the actors and their goals, specifying actors' policy preferences, determining how they group themselves, and following their interaction with other social institutions. The objective of income maximization leads actors to a variety of subsidiary concerns, including preferences for certain government policies. While capitalists and workers are assumed to have the same objective of earning as much as possible, their policy preferences may be different: capitalists might prefer taxes to be paid entirely by workers, while workers might prefer all taxation to be on capital. The chapter explains the economic determinants of policy preferences and discusses the political determinants of the translation of these policy preferences into pressure on policymakers. Once the policy preferences of socioeconomic interests are determined and their pattern of internal political organization is understood, the next step is to discover how organized interests work within or against existing institutions to achieve their goals.
