Political economy is future-oriented and anticipates possible futures in a reflexive manner, being aware of the normativity of forecasting that itself can contribute to shaping the future.
Political economy is the oldest social science. Originally it referred to the study of social activities of production and exchange defined largely in terms of morality, prevailing customs, laws and system of government. Although many thinkers argued – a sentiment shared in part by critics – that individual self-interested action can lead under certain favourable social conditions, through self-regulating markets, to order and progress, the taken for granted assumption of political economy has been that production and exchange are inseparable from society at large. This field has also involved debates on political economy and security over the past 200 years. Is free trade conducive to peace? Does lack of aggregate efficient demand lead to imperial expansion?
During the heyday of neoclassical economics, political economy became in many ways a subordinate discourse. Its study and influence reduced through the 20th century as economics expanded and political economists began to expend time and effort in critique of economics’ methodological and contextual separations. Political economy, however, remained vibrant amongst some branches of what has become known as heterodox economics, including those working from the legacies of Keynes, Marx, Schumpeter, and Veblen. This vibrancy was given additional impetus in a third phase beginning in the 1970s with the rise of a new focus on the international and the global. A former finance journalist Susan Strange wanted to integrate the study of international politics and economics, arguing that “economists simply do not understand how the global economy works” due to a poor understanding of power and an over-reliance on abstract economic models. This was the beginning of IPE (International Political Economy) in Britain. In North America, the works of Immanuel Wallerstein introduced neo-Marxist world systems theory, which shared themes such as hegemonic stability with IR scholars such as Robert Keohane and Robert Gilpin and economist Charles Kindleberger. In the 1980s, the works of Robert Cox launched an approach that was soon labelled as neo-Gramscian, although Cox drew on many writers of diverse persuasions.
The Helsinki approach to global political economy tries to go beyond these openings, arguing that IPE has thus far failed to address satisfactorily two key deficiencies from which it has arguably suffered from the beginning, including the pioneering work of Susan Strange, Robert Cox and others. These two deficiencies are philosophical and economic immaturity.
Research and teaching in Helsinki are based on the following fundamental principles: (1) there is a limit to how far IPE can go without addressing explicitly the problems of economic theory; (2) the mainstream of economics has insulated itself from the concerns of social scientific IPE, but there are several theories and traditions from which to draw insights and explanatory hypotheses; (3) systematic engagement with different traditions requires an explicit metatheoretical framework such as (critical) scientific realism or pragmatism; (4) in line with critical debates within the discipline, the field should rather be called Global PE rather than IPE; and (5) the debates on the trans- and supranational nature of this discipline should be reinvigorated in the current world-political context, which is an integral part of the Helsinki approach in the 2020s and beyond.