New Political Economy Review (Issue 1)

Author: Wang Dingding, Editor-in-Chief
Publisher:
Publish Date: 2005-04-01
Features: If economics only studies resource allocation efficiency, it might as well stay at the level of pure rationality, completely detached from practice. This level of pure rationality is indeed very important, much like the necessary prerequisite for practical reason that Kant discussed regarding transcendental reason. However, economics that remains at the level of pure rationality cannot yet become "political"—typified by the concept of "Paretooptimality," which does not involve conflicts of interest and thus cannot be a political concept. Even the concept of "Pareto improvement," if it is merely a definition, would not involve conflicts of interest in the real world or political activities, and therefore cannot be a political concept. However, as soon as we attempt to make economics "practical" and try to reform the efficiency of resource allocation in the real world, we realize that the economics of the real world is forever immersed in conflicts of interest. This fundamental awareness of the issue is the awareness of "political economy," and it permeates all political economic problems, from daily necessities like food, clothing, and shelter to wages, taxes, labor, capital, land, finance, public finance, the environment, and public goods—all are excluded. Being immersed in the conflicts of interest between different groups and individuals while seeking to improve resource allocation efficiency—this is the theme of political economy.