Political economy is the study of the interaction of politics and economics. Where politics is the study of power and economics, the study of money or it focuses on the creation and distribution of wealth. It is taking a look at a specific way on how goods and money get distributed within a particular country or between states. Both power and money go together, they are interchangeable.
- Markets. This is defined as what do people buy or sell.
- Property. This is the ability to do what you want with an object.
- Public Goods. These are things that are diffused to everyone. They usually come from state mechanism.
Different theories of political economy:
- Liberalism. This is a free market view.
- Mercantilism. This concept is followed when the State should have the most power in the market and economy.
- Communism. This concept believes that everyone should have equal amounts of properties. It results to people jointly owning everything.
- Social Democracy. There is a regulated market. It is a mix of Liberalism and Communism. The Government provides a lot of Social services to make up for the issues in the pure market.