Political Economy

“Economy”: from the Greek, oikonomia, from oikonomos, manager of a household, steward, from oikos, house:

The domestic arrangements; the organisation of the household; and from this:
The constitution, organisation, or structure of something; an ordered system; physical arrangement or layout. (OED)

This was the meaning of “economy” in English up until the late 1600s and mid 1700s.

In 1690 two books were published in England. One was by Nicholas Barbon, called A Discourse of Trade; the other was by William Petty, and called Political Arithmetick.

The sense of economics as “political arithmetic” began to take hold after Petty, but the meaning is still very wide. Politics is what people do, altogether. Politics is the way we live. “The personal is political”. Aristotle wrote that man is the zoon politikon, the “political animal”, meaning that politics is what distinguishes human beings from beasts. So at this stage “political economy” still means the political arrangements in general.

Karl Marx studied philosophy and law in the 1840s and was awarded a doctorate in his early twenties. He read politics widely and was exposed to a historical political laboratory in which he achieved mastery very quickly. These studies led him to a view of the structure of society, in other words “political economy” in the old, general sense. He saw the way human society was arranged in classes, and that the whole structure rested on a base which had to do with production.

From the time of Barbon and Petty, up to the time of Marx, works had been published on the social production of wealth. Notable among them are Adam Smith’s 1776 The Wealth of Nations and David Ricardo’s 1817 Principles of Political Economy and Taxation. But Marx realised that although these writers had made useful discoveries (especially Ricardo’s labour theory of value), they had not worked everything out. Glaring deficiencies existed. For example, the nature of money was not understood. The source of profit was also not understood.

Marx set out to read and study everything about production and trade so that the rest of his work (the philosophical and socialist parts) would be complemented by a fully worked out science of material production. This did not exist, so Marx had to create it. One could say that the lack of this science of production threatened the other parts of his work.

The first “concrete” statements of Marxism (e.g. The Poverty of Philosophy, 1847, the Communist Manifesto, 1848) preceded Capital, Volume 1 by two decades. Marx continued to work on these problems until the end of his life in 1883, but he never divorced “economics” from “politics”.

Marx’s work demonstrated very clearly how the system he called “capitalism” worked, and also, of course, how pernicious it was. It was inevitable that the beneficiaries of the capitalist system would seek to defend it against Marx’s criticism. The way this was done was to separate what is now called “economics”, from politics. This happens with William Jevons (General Theory of Political Economy 1871), Alfred Marshall (Principles of Economics, 1890), and John Keynes (General Theory of Employment, Interest and Money, 1936).

What all this shows at the very least is that the terms “Economy”, “Economics”, and “Political Economy” are “loaded” ones. They are “contested”, still. Karl Marx used political economy in the way that Ricardo had done, but after Marx the bourgeoisie attempted to “move the goalposts”. Hence we have the modern pretence that “economics” can be dealt with as a technical specialism, separate from politics. So we have the Tony Twines and all the others on television as expert economists, and Tito Mboweni and Trevor Manuel pretending that “there is no alternative” to their GEAR policies, for “economic reasons”.

The struggle continues!

Frederick Engels and Karl Marx

Frederick Engels was a rebellious young man with an exceptionally sharp mind and enormous curiosity. His father decided not to allow him to go to university but instead made him work in the father’s business (but with one year in Berlin as an army officer cadet).

Not going to university hurt Frederick badly.

The father’s business was textile manufacturing, based in the Rhineland part of Germany (Prussia). There was a branch of the business in Manchester, England. This must have been one of the earliest examples of “foreign direct investment” in manufacturing.

“Manchester Capitalism”

Manchester in the 1840s was the first large manufacturing city in the world. Many such cities came after (e.g. Johannesburg half a century later), but Manchester was the first, and Engels was there to see it happen. He made friends with working class people, including a girl, Mary Burns, and made a study of Manchester which was published as “The Condition of the Working Class in England”. Nothing like it existed before Engels. It is still a classic work on urbanism and class.

Frederick Engels’ relations with his father are of a kind that many a young man can relate to. He left the firm and became a professional revolutionary. On one occasion, in 1848, father and son confronted each other over a revolutionary barricade in their home town of Barmen, and had a furious row. Frederick Engels joined a military detachment of the revolutionaries and fought with them to the end.

By 1852, both Marx and Engels were in exile and broke. The revolutionaries had been defeated and the remnants were a sorry lot in general (sent up by Marx and Engels in “The Heroes of the Exile”). Frederick Engels had to go back to his father for a job, again in Manchester, and worked at what he called his “damned huckstering” for nearly 20 years from that time. He helped to support Marx in London while Marx worked on “Capital” and in working-class organisations such as the “First International”.

Engels had a respectable house, and another house in a working-class district where he spent time with Mary, and after Mary died, her sister Lizzie. He read and wrote on a wide variety of subjects and learned a very large number of languages. Marx spent time in Manchester, and Engels spent time in London. Engels was Marx’s equal in understanding and it is impossible to separate each one’s work from the other’s. Theirs was a division of labour between equals.


Marx and Engels were born in 1818 and 1820 respectively. They happened to be exceptionally lively, talented and courageous people. The Great French Revolution of 1789-94 overshadowed their times in the same way that "The War", the 1939-45 war against the Nazi fascists, overshadows our times. “The War” has led to many historical developments, especially the national liberation movements of the last 50 years, and so it was in the time of Marx and Engels. The effects of the French Revolution were still playing out while they were growing up, and broke out again in full in 1848, in France, Germany, and other European countries.

These two men made the most of their circumstances, and their circumstances were extraordinary. It is as if they were standing at the corner of history, able for the first time to see both ways. They noticed everything and wrote everything down. They rose to the occasion magnificently.

For the purposes of the study of political economy, we need not worry that Marx and Engels are still controversial. First and foremost they were clear-minded witnesses to the change in history and in political economy, the effects of which are still felt in South Africa today. There can be no honest study of political economy which neglects the fundamental contribution of these two men.