Political Economy: Ontology and Positivism - Assignment Example

Political Economy Insert Insert Question one, Definitions, explanations and significance of the following terms Ontology From the contextual definition, it refers to the study of being or the reality. The word was extracted from the Greek word onto meaning “being”. The fact that is highlighted here is independent and dependent reality. The interpretation of human reality is an independent while from the other perspective is that reality depends on human interactions. In political economy, ontology helps a lot in the identification of the nature of politics in relation to the economy. Politically, ontology captures this idea into is dependent and independent reality. In an independent point of view, we can see that politics cannot run without the support of voters. They need to need to persuade the people on the ground for their success (Andrew, 1996). The independent reality focuses on the respect that politics can stand on its own without the support of the people on the ground. Economically, ontology has some significance. About understanding the philosophy of money and its use, you need to dependently and dependently analyze using the ontology. Economists come through critical thinking and proper planning in terms funds. When an economist fails to explain this, they will find themselves on the loose. Economic and political life work hand in hand. For the success of any nation and other organizations, ontology has to be utilized and followed to the later. Positivism The context points out that positivism are a description of the belief that the study of social work in the similarity to the study of the natural world. Just as it can be applied in physics, casual mechanism of political economy can be attained through objective understanding. From the article being studied, the discovery of universal laws the purpose of positivist science is achieved (Andrew, 1996). The only valid experience for social scientific inquiry is the measurement of the phenomenon. Positivism is useful in aspects in relation to the political economy. It has the simplified explanation in the form of parsimony; this allows the political leaders and other stakeholders of the economy to perform their duties quickly in simple manner. Correcting of mistakes and identifying places that went wrong has been simplified through the positivism. Generalization performance has also been made easy due to the ranging number of significant data. The introduction of the big data enables quick access and faster retrieval of files. In dealing with politics and economy, appropriateness has to be enhanced. The enhancement is implemented with quantitative methods (Clift, 2014). From the relation of similarity of the social world and natural world study gives and impression that positivism has to be applied in politics in order to increase and uphold the economy the political structure in the present days. Methodological individualism It was defined as the individual pursuit for self-interest. The Maximizing of primary utility is done by individuals who are seeking their pleasure and to reduce pain. Smith translated these into economic terms. As long as the individuals are left to perform their rational self-interest in a context of economic interdependence, is referred to as invisible hand of the market. Thus, the supply of goods will be balanced out with the demands for the same goods. Naturally, the condition of the market is balanced. From the illustrations of the founder of liberal traditions, it pointed out that political economy is defined in the materialistic terms and motivated by their economic interests (Clift, 2014). The author also gave the same statement to individuals and ration. The natural working of the market is intervened by the economy skews bringing in policy that would privilege minimal intervention by the state into the economy. The physical arrangement of thing is the market economy. It is significant in a way that at some point have to be individualized using desired methodologies and the applied to politics (Clift, 2014). Labor and theory of value Employment is determined by the value of the commodity; this is described in the cost and the time taken to produce a product. Labor will eventually produce profit because of the creation of value. From the working exercise, production of surplus value is achieved. There are always less pay and more labor in terms of value. It’s not categorical for a worker to get a less pay while he/ she has worked more hours and has created more profit to firm and be less (Clift, 2014). Underpayment kills the morale of working harder. Restricted economy in some cases leads to the organizations failure. The management has to focus on the ways on how to reduce surplus labor through increasing wages and maximizing the speed of work. Saving of cost by the firms works positively to the profit of the organization but due to the rising economy and political affiliations, this negatively affects workers. From these antagonistic relations, workers will opt to go for a strike and form unions that will enable them air their complaints and bargaining. Labor and theory of value are important to the political economy because for the economy to succeed, work has to be done. On the other hand, labor is the backbone of politics (Costas, 2011). Methodenstreit The writer gave its definition as the debate over the proper method of studying political economy. From the debate, pitching of the component in the historical approaches versus the proponents of abstracts universal methods. Through the 19th century, there were increasingly abstractions of the liberal political economy. Trials to minimize universal and generalizable laws from an established set of assumptions have been performed using number of ways, but it was not put to use. In the inherent liberal tradition of political economy, liberalism tends to abstract its subject from social and chronological context in order to get general principles (Costas, 2011). The writer also pointed out the marginalized in a revolution. The trial by learned fellows to find the exact order of economics that is different from the initial classical political economy in vain. Classical political economy was deeper developed using the inherent abstraction of liberal traditions. The significance of this aspect of the political economy is that it gives the comparison of the past economic events with present events. The Methodenstreit in politics advantaged politics in the other perspective; using historical leaders as role models and taking their examples uphold present political life in into another level. Question 2, According to the context, institutions are the collections of standard operating procedures and structures that that define and defend interest. Institutions in many perspectives influence the political economy. Being a humanly devised constraint that shape human interactions by providing structure to daily living, it plays a significant in the development of political economy. When intuitions are categorized as a structure, they influence the individual action because of the hold nature they possess. Institutions are classified into categories that help in serving typical citizens effectively. These categories are regulatory public institutions, administrative and judicial bodies, and financial institutions. Most organizations put interests of the public a priority and usually working towards customer satisfaction (Gosta-Esping, 2009). They do not work towards rational actors. Instead, they serve every individual that have availed him or her there. In the class analysis factor, the formation of class interests that base on the class conflict that eventually will bring competition to the market. Institutions without competition, its production will not be at the standard base of a formal system. The lack of competition affects the political economy negatively. Development of body creates job opportunities and ready market for individuals leading improved economy, and the standard of living is expanded. Economic activity is made possible through the institutions (Jane, 2010). The possibility of this is done through the development of markets and enforcement of property rights using legal frameworks, this accomplished through markets creation. It also provides the basic rule in which economy activity occurs. Another importance of institution that influences the political economy is the seeking of explanation developments in the political economy as an outcome of determining causes of firms. The growth of any economy and political structure depends on the performance of institutions. If the systems will run at loose, they the economy will fall, also when companies operate and produce profit, the economy will be improved. These institutions affect the behavior of the economy (Leo, 1980). The assistance in defining of interest through the mediation of economic interactions between agents leads to economic exchanges that rarely occur in the institutional vacuum. Institutions affect economic performance and change. The effect occurs when systems learn to deliver stability and continuity to the changing nature of economic relations and market activity. According to Clift, potential problems that are evident in most institutions are the individualism. Individualism creates a conservative bias by privileging dependency over instability and change. The condition only tries to explain the change only as a dramatic crisis over continues and incremental facts. “What needs explaining, but what tend to be naturally assumed within functionalist accounts, is how economic, efficient institutions ‘win out. To address this issue, we need to bring the politics back in, for institutional survival and will probably be a result of political skirmishing (Clift 113).” From social and institutional relations, institutions need to be checked within the larger social context of power relations. Institutions in most occasions are classified as a product of socio-economic conflict (Clift, 2014). They are viewed as the cited that condensation is an ongoing situation which if not handled and at an early stage, it may lead to the downfall of the company. These problems increase the issue of the relationship between the organization and workers interest. In a situation where it happens that institutions have become the instruments of robust pursuit and economic interest, the company lost competitiveness and market. When this happens, the company will operate at loose and eventually affecting the economy of the nearby community and the even nationally. Failure to be autonomous from the private interest designed to regulate will affect the institutions focus, and they may produce substandard products and services to the clients (Vivien, n.d.). Regulatory capture happens when the boundaries between institutions and interests become porous to the point where power interests can capture the institutions that are in charge of their regulation behavior. The dominant choice is another potential problem in the systems. It occurrence results from a rational choice. Sometimes intentional alteration of systems in order to optimize strategic economic outcomes is such as payoff matrices (Vivien, n.d.). The proposal by the two authors indicates that some of these institutional problems can be rectified. They pointed out the equal sharing of power relations by all parties. Powers the major root of all misunderstanding, for instance, a lower level management wants to overrule the higher level creates conflicts. The trending competition of market also is another factor aired by Merand and Jenson. When the institution has a healthy completion, there rises insight individualism. Every level of management wants to be praised that it was their effort to the company’s higher production. Opposition is another factor that was pointed by the writers. Opposition from the employers, employees, and other stakeholders of the organization has adverse impacts on the company’s future production. To achieve in an organization, it calls for the unity of all the departments in the institution. Conflicts of interest bring socio-economic disputes that may result in small production and even firms down in the future. “An institution is a set of formal rules and informal norms that persist through time (William, 1986).” If these rules and standards are adhered to by the lower management level, to the top most level of control then institutions will produce maximally, and the economy will be improved. When the economy is improved living, the standard will be upgraded which will affect rising of political economy. References Andrew Gamble, ‘Ideas and Interests in British Economic Policy,’ Contemporary British History 10: 2 (1996). Ben, Clift Comparative Political Economy: States, Markets and Global Capitalism (Palgrave Macmillan 2014) Costas Lapavitsas, ‘Theorizing Financialization,’ Work, Employment, and Society 25: 4 (2011). David Coates, Models of Capitalism: Growth and Stagnation in the Modern Era, chapter 7. Murray Knuttila and Wendee Kubik, ‘Neo-Marxist Theories,’ in State Theories 3/e. Gosta-Esping Andersen, ‘The Three Political Economies of the Welfare State,’ The Three Worlds of Welfare Capitalism. Jane Jenson and Frédéric Mérand, ‘Sociology, institutionalism and the European Union,’ Comparative European Politics 8: 1 (2010). John L. Campbell and Ove K. Pedersen, ‘Knowledge Regimes and Comparative Political Economy,’ in Daniel Béland and Robert Henry Cox, (eds.), Ideas and Politics in Social Science Research. Leo Panitch, ‘Theories of Corporatism: Reflections on a Growth Industry,’ British Journal of Sociology 31: 2 (1980). Martijn Konings, ‘European finance in the American mirror: financial change and the reconfiguration of competitiveness,’ Contemporary Politics 14: 3 (2008). Richard Hyman, The Political Economy of Industrial Relations, chapter 2. Richard Clayton and Jonas Pontusson, ‘Welfare State Retrenchment Revisited: Entitlement Cuts, Public Sector Restructuring, and Inegalitarian Trends in the Advanced Capitalist Economies,’ World Politics 51: 1 (1998). Vivien Lowndes, ‘Institutionalism,’ in David Marsh and Gerry Stoker (eds.), Theory and Methods in Political Science. William Coleman, ‘The Capitalist Class and the State: Changing Roles of Business Interest Associations,’ Studies in Political Economy 20 (1986). Read More