Political Economy

Political economy is the study of how economic and political institutions co-constitute each other — not economics applied to politics, nor politics applied to economics, but a unified analysis of the feedback loops through which markets shape states and states shape markets. The classical tradition, from Adam Smith through Karl Marx to Douglass North, treated the distribution of power and the distribution of wealth as inseparable questions. Contemporary political economy has fractured into competing methodologies — formal models of political institutions and economic growth, historical accounts of regime transitions and property rights, and critical studies of global capitalism — but the central insight remains: economic outcomes are politically determined, and political outcomes are economically constrained. The field has become especially relevant for understanding how artificial intelligence is reshaping the bargaining power between labor and capital, and whether the regulatory state can keep pace with concentrated technological power.