The Making of the Market: An Introduction to Political Economy

What are the workings of a capitalist economy? Does the market make people richer or poorer? Is the market a disciplining institution that produces alienation, or is it the best mechanism to allocate resources in society? How does economic theory influence political ideology with regards to these issues? Are the notions of free market and competition an illusion — and just what do we mean by a “free market,” anyway?

This course is intended as a critical introduction to political economy. Students will evaluate these questions by reading selected writings from major figures in the field. We begin with extracts from Adam Smith’s The Wealth of Nations, introducing such complex notions as the labor theory of value, the benefits of free trade, productivity, and the division of labor. Although Smith grounded his claims in self-interest and market exchange (what he called the human “propensity to truck, barter and exchange”), he does offer a more nuanced view of welfare, progress, and self-interest than is usually acknowledged. We will then turn in quick succession to a series of thinkers who have both extended and critiqued the foundations of political economy, from Smith’s time up to the present day. Drawing on readings from Karl Marx, Karl Polanyi, John Maynard Keynes, Thomas Piketty, and others, we will investigate the distinguishing characteristics of the “market society”; whether a high concentration of capital and rising wealth inequality are deep-seated trends of capitalism; and the role played by market failures and financial crises. Throughout the course, we ponder what conceptual framework can be formulated for a system of production, distribution and exchange.