Choosing in Groups - Intro to Political Economy


Introduction to Political Economy is a self-contained and nontechnical overview of the intellectual history of political economy, the logic of microeconomics, and the definitions used in macroeconomics. It introduces the notion of a political economy, emphasizing the moral and ethical problems that markets solve, and fail to solve.


  1. The example of Lewis and Clark, and the Corps of Discovery: sometimes groups have to choose, AS A GROUP. They all consent to the rules, and are thus bound by the outcome, even if they disagree with it. Market institutions cannot help here.
  2. The definition of "politics" is the negotiation of a constituted group, with rules of decision, and also entry and exit. People choosing in groups this way are engaging in "politics."
  3. The example of Odysseus, bound to the mast. Can people commit now to be bound by their choices?
  4. The "Prisoner's Dilemma": We want everyone else to be bound by rules, but we know we want to cheat. So we voluntarily agree to be bound to be coerced, provided everyone else makes the same agreement.