At the time of Adam Smith’s wealth of nations, there was a schism between eastern and Western Europe on the role of politics in the economy. Eastern Europe was influenced by much stronger aristocracies that exercised stronger control of the populace and thus lacked the small business competition that inspired smith.
While many “small” businesses offering similar products compete on a marketplace subject to the law of supply and demand, large centralized monopolies compete for money producing “slots” often allocated through a political process. The political figures in control of these systems are often free from material needs and thus less motivated by profit.
At the extreme of political economy, money ceases to matter in the internal sense. A state can simply order workers to work without pay or be punished, burn debt that they don’t want to pay, or lock traders into a room with orders to buy. There is still an economy, but it becomes one of political favor which is earned through multiple mechanisms.
> A state can simply order workers to work without pay or be punished, burn debt that they don’t want to pay, or lock traders into a room with orders to buy. There is still an economy, but it becomes one of political favor which is earned through multiple mechanisms.
Without irony, this is my observation for how corporations work internally. The currency between teams is backscratching.
The USSR was a big corporation with a license of coercive force.
Exactly right! A corporations internal governance has only a loose correspondence to a market economy. It's quite common for individuals to be promoted who have actually been counter-productive to the stated market goals of the organization.
While many “small” businesses offering similar products compete on a marketplace subject to the law of supply and demand, large centralized monopolies compete for money producing “slots” often allocated through a political process. The political figures in control of these systems are often free from material needs and thus less motivated by profit.
At the extreme of political economy, money ceases to matter in the internal sense. A state can simply order workers to work without pay or be punished, burn debt that they don’t want to pay, or lock traders into a room with orders to buy. There is still an economy, but it becomes one of political favor which is earned through multiple mechanisms.