STATE CENTERED APPROACHES TO POLITICAL ECONOMY

STATE CENTERED APPROACHES TO POLITICAL ECONOMY

One focus in the study of political economy is to understand power in their interactions with economic phenomena. In a market concept closely related to the idea that individuals can select and make contracts voluntarily. Market and the buyer is a structure that stands independently. Both run on their own purpose.

Markets are often understood as a group of people. For such reasons, then the opportunities in the market is not sufficient. Economic perspective in such a concept, will contradict with the concept of power in two meanings. First, market participants can make a voluntary choice, but they are limited by given factors such as factors of production, technology, factors of production, technology and the choice made by other actors. Thus, the choice owned limited number of market participants. Market participants can accept or reject a transaction. result of choice, between receiving or rejected, was not strong enough for the advantages and disadvantages of market participants. This occurs because, in fact, gains or losses are not only achieved from a single transaction only.

By the properties of such market, the economic behavior can be analyzed as a mutually beneficial exchange. Thus reinforced by the nature of Pareto optimization criteria. An exchange is said to have advantages Pareto (Pareto-superior) if the exchange is one or more be better off without harming others.
The exchange is also advantageous in terms involved in these transactions.

The use of Pareto optimality standards and original power factor can not avoid separately as a factor in political economy. Pareto optimization criterion allows everyone to avoid a loss. Such concepts as well as ignoring the factor of power. The reason, the potential power of the aggrieved actor.

For the adherents of the theory of market capitalism, the rule should not be there in the market mechanism. Power is not desirable and should be inhibited involvement in market mechanisms.

In recent years, the term "political economy" was used by several thinkers to mention the relationship between market power. For example, Robert Keohane states that "when in a economic, principals apply power to one another, then it is political economy." More radical statement put forward by the radical economist, that economic capitalist market is a system of power.

Interpretation of Powers

The most common definition of power is that the view that power is our ability to achieve our goals in this world. Power is a form of disclosure of the idea that to achieve a goal, then we must do something to influence and change the world around us. In an effort towards it, often we are faced with many obstacles.

Obstacles and difficulties is an important factor in defining the concept of power. Max Weber in his book "Economy and Society defines power as" the probability that an actor in social relations capable of carrying out his own will, even with many obstacle, without heed for elementary-elementary probability to determine it." However, the factor of resistance is not a necessary condition. In power, barriers can arise from self and also from outside. The absence of obstacle can also shape social and political institutions.

In summary there are three kinds of power, namely: the power to reach the goal by defeating nature, the power of others and power with others.

Interpretation of Interest

Power closely related with interests. Relations between them are very complex. In the perspective of Weber, a capitalist is not the sole holder of interests. He was only as the executor (steward) of the interests of others.

In the view of economists, the interest will be automatically translated into a choice. Furthermore, the selection automatically becomes a decision about which of the alternatives that are available to be selected. If someone makes a choice freely, it can be concluded that the choice was based on their interests. There is no compulsion for these choices. The concept of such interest is referred to as "direct interest" (direct interest). In terms Flathman called Subjective interests, and Lukes call with behavioral interest. The concept of interest like this is suitable for the concept of a simple rule.

The concept of the interests of both called with the real interests or objective. Connolly said that the real interests are the interests that formed due to awareness of oneself (self-awareness) and the choices made with full information (fully informed choice).

Power and Market Economy

One of the contributions of the capitalistic market economy is its ability to grow the wealth of society. When the wealth of society grows, the individual's needs will be met. Increased wealth can be defined as well as increased power in the sense of a direct interest (direct interest). Wealth-shaped objects that can satisfy the requirement. That way, the property gives us the power to achieve something.

Here are three examples of the wealth that gives power. Owned companies to market forces, (2) the labor contract, (3) relations of production within the company. The first two examples, look at the power authority with actor-based approach (agency-oriented view) where the very foundations of structure of power subject to the strategic actions of the powerful. While the third case is an example for the production relations within the company, further highlight the role of structure in the making of labor depends on the capital so that the role of the perpetrator to be reduced.

In general, power and economy are two separate entities. There's even the fact that they negated each other. The proof is in The New Palgrave: A Dictionary of Economics, a dictionary of economics can not find one word about power. Still, the idea to construct a political economy based on the concept of power and wealth is something interesting.

 In a study of neoclassical economics sought to limit its focus on the efficient exchange so that far too difficult to discuss the study of power. In general, the neo-classical economic thinkers tend to avoid the term "power" (power). If anything, it is merely talk about power in the sense of power over others with a focus on efficiency is reduced. But with this strategy, the neo-classical economics can no longer shift into the science of allocation efficiency.