Prelude to Political Economy: A Study of the Social and Political Foundations of Economics by Kaushik BasuPrelude to Political Economy: A Study of the Social and Political Foundations of Economics by Kaushik Basu

Prelude to Political Economy: A Study of the Social and Political Foundations of Economics

byKaushik Basu

Paperback | June 25, 2003

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Mainstream economics was founded on many strong assumptions. Institutions and politics were treated as irrelevant, government as exogenous, social norms as epiphenomena. As an initial gambit this was fine. But as the horizons of economic inquiry have broadened, these assumptions have becomehindrances rather than aids. If we want to understand why some economies succeed and some fail, why some governments are effective and others not, why some communities prosper while others stagnate, it is essential to view economics as embedded in politics and society. Prelude to Political Economyis a study of this embeddedness; it argues for an 'inclusive' approach to institutions and the state.Modern economics recognizes that individuals' pursuit of their own selfish ends can result in socially suboptimal outcomes -- the Prisoner's Dilemma being the stark example. It has been suggested that what we need in such an eventuality is 'third-party' intervention, which can take the form ofimposing punishment on players. Kaushik Basu objects to this method of wishing third parties out of thin air. He argues that if a third party that could impose its will on others were available, then it should have been modeled as a player to start with.The adoption of such an inclusive approach has implications for our conception of the state and the law. It means that the law cannot be construed as a factor that changes the game that citizens play. It is instead simply a set of beliefs of citizens; and, as such, it is similar to social norms.What the law does for an economy, so can social norms. The book discusses how the nature of policy advice and our conception of state power are affected by this altered view of the state and the law.As corollaries, the book addresses a variety of important social and philosophical questions, such as whether the state should guarantee freedom of speech, whether determinism is compatible with free will, and whether the free market can lead to coercion.
Kaushik Basu is Professor of Economics and holds the C. Marks Chair in the Department of Economics at Cornell University. He has been Visiting Professor at the Department of Economics, Princeton University (1989-91), Member, Institute for Advanced Study, Princeton (1985-6), and Professor, Delhi School of Economics (1985-94). He receiv...
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Title:Prelude to Political Economy: A Study of the Social and Political Foundations of EconomicsFormat:PaperbackDimensions:304 pages, 9.21 × 6.14 × 0.63 inPublished:June 25, 2003Publisher:Oxford University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0199261857

ISBN - 13:9780199261857

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Table of Contents

Part I. Preliminaries1. Introduction2. Games and Misdemeanors: Game Theory for the Uninitiated3. Individual RationalityPart II. Society4. Social Norms, Culture and BeliefsPart III. The State5. Law and Economics6. Power and Coercion7. On Advising Government8. The Concept of "State"Part IV. Ethics and Judgment9. Welfare and Interpersonal Comparisons10. Utilitarianism and RightsPart V. Conclusion11. Some Concluding RemarksAppendix. Notes on Methodology: Various and Sundry

Editorial Reviews

`Overall, the book is well written and both interesting and convincing.'Journal of Peace Research