Political Economy: An Overview
by Ryan Setliff

"A human life, I think, should be well rooted in some spot of a native land, where it may get the love of tender kinship for the face of the earth, for the labors men go forth to, for the sounds and accents that haunt it, for whatever will give that early home a familiar and unmistakable difference amidst the future widening of knowledge. The best introduction to astronomy, is to think of the nightly heavens as a little lot of stars belonging to one's own homestead."
—George Eliot

"Economics can tell us how wealth is created, and how, once created, it is distributed; but it is powerless to tell us how wealth should be distributed, at least not without explicit information about how much people value their material wealth," notes Samuel Gregg.Gregg, Samuel, Economic Thinking for the Theologically Minded, (Lanham, MD: Univ. Press of America, 2001,) p. 49. Gregg writes further,

The distribution of the end product of economic activity—that is, material income and wealth—is strongly influenced by the distribution of the ownership of basic resources. If someone owns a great deal of land and capital or, alternatively, is gifted with some rare and highly prized talent (such as a beautiful singing voice,) it usually follows that such a person is richly rewarded by the market system. If the distribution of basic resources—land, labor, capital, and entrepreneurial ability—follows a particular pattern, the distribution of income and wealth will follow much the same pattern.Ibid. p. 49-50.

Taking this aforesaid observation into consideration, Old Right critiques of political economy characteristically embody a recognition of the interplay between the body politic and the economy; and in recognizing the perilous consequences of political centralization, coercive wealth redistribution and other state intervention in the economy perpetuated by the managerial state, the Old Right favors peaceful steps toward political devolution — supplanting the national unitary state with a decentralized federal polity. Samuel Gregg astutely observes,

Economics tells us that changing the distribution of the fruits of economic activity is a costly business. Generally, the distribution can be changed only through the imposition of taxes, subsidies, or regulations of one sort or another. Much theoretical and empirical work by economists shows how severely interventions of this sort can affect the wealth-creating ability of an economic system...Ibid. p. 50

Hence, the Old Right critique recognizes the folly of such economic interventions as wealth redistribution. Instead, the Old Right favors political devolution, and reforms which mitigate against the centralization of the managerial state and its coercive schemes of wealth redistribution, in favor of the principle of subsidiarity. Political devolution and a renaissance of federalism would contribute to the possibility of achieving the ideals of the humane economy, by structuring economic, political and social institutions on the humane scale. Predictably, within a decentralized republic with vibrant local and regional cultures, the natural tendency of the market for economic development is for a more widespread distribution of property and capital, a broader more affluent middle class, and the preponderance of small-scale enterprise and entrepreneurship. Joseph Scotchie postulates,

A dramatic decentralization of nearly all government functions is the tenet that unites libertarians and traditionalists. If regional cultures were revived, then they would hardly need a cradle-to-grave social security state to guide its citizens through their lives. How would people live? As Allen Tate explained in the dark years following World War II: "It is my impression that [people] get fed and clothed incidentally to some other impulse, a creative power which we sometimes identify with religion and the arts." Thus culture drives economics, as it does politics. Healthy regional cultures might mean liberation from an overbearing centralized state. This is in essence the distributist ideal.The Paleoconservatives. Joseph Scotchie, ed. (New Brunswick, NJ: Transaction Publishers, 1999), p. 19.

Diseconomies of Scale: Dismembering Leviathan by Donald W. Livingston

“Free trade,” like “free love,” is a beguiling abstraction that hides more than it reveals. Absolute free trade would be an exchange of commodities between two people without the coercive intervention of a third party. But economic exchange is always embedded in a cultural landscape of noneconomic values, which impose restraints. Blue laws prevent trade on Sundays, medieval Christendom prohibited charging interest on money, and some think no decent society could legalize the sale of or firearms. If someone disagrees with these restraints, it is because he rejects the moral ideals they express, not because he favors “free trade.” Within the restrictions imposed by usury laws, trade flourished in medieval Europe; indeed, it gave rise to the practices we call “capitalism” today. Those who value liberty may seek to minimize these constraints, but economic relations cannot exist outside of noneconomic restraints.

Today in history marks the two hundred and twenty-ninth anniversary of Henry Clay’s birthday. Clay was born in Hanover County, Virginia on April 12, 1777. Clay was a founder and key leader of the Whigs and the National Republican Party in the United States, though he got his start in politics as a Democrat. Clay was admitted to the bar in 1797 and commenced practice in Lexington, Kentucky. He rose to become a prominent U.S. Senator for Kentucky by the 1830s, and he gained considerable prestige in the eyes of many historians for his role in the Missouri Compromise of 1820 as a Congressman. According to Carl Schurz, a German émigré, professed national revolutionist, and a Union general, Clay was said to be a political success because: