4 - Political economy: the science of the state and the market

Summary

Political economy, the science of production, buying and selling and their relationship with law, custom and government, and thus connected to the changes in government which we examined in the last chapter, was largely elaborated in the Enlightenment. The term was first used in French in Antoine de Montchrétien's 1615 Traîté de l’économie politique. It was not replaced by the term ‘economics’ in English until the 1890s. Many seventeenth-century writers worked in this field but it was in the Enlightenment that the subject came together far more strongly as a consistent academic discipline. It was formed by the confluence of several contemporary sciences of the economy in its relationship to government, such as Cameralism, physiocracy and mercantilism. It was also influenced by views of the political economy of distant civilisations, such as China. University chairs in political economy appear for the first time in the eighteenth century, the first being at Naples, held by Antonio Genovesi; in 1763 one was founded in Vienna, held by the Cameralist statesman Joseph von Sonnenfels, in 1769 for Beccaria in Milan, and in 1782 for Paradisi, the theorist of Italian decline, at Modena. The field acquired a formalised mathematical language in the work of Pietro Verri in Milan, who argued for the status of political economy as a science wedded to objective laws. Other conceptual advances in political economy also marked the Enlightenment: in France, the Physiocrat school of political economy developed macro-economic models for the first time, in François Quesnay's 1758 Tableau économique, while the Scots thinker Adam Smith developed the first full-scale description of mercantilism in an industrialising society.