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Political Economy Basics

Part 1  Political Systems Are About Power    U.S. Democratic Federalist Republic

Part 2  Economic Systems   Capitalism  Other Economic Systems   Modern Criticism    Country Policies

   Part 3 Building America's Democratic Federalist Republic     3. Elections    4. Our Leader's Thought   

5. Some Are Unhappy    6. The Flow of History Book Summaries   

 7. Political Economy Book Reviews   8. War Politics Book Reviews  

See Our Free U.S. Government and Politics Course    7/1/21

Political Systems Are About Power

power is controlled by the people

Commonwealth community founded for the common good

Oligarchy power effectively with a few people.

a. Northwestern study: US is an Oligarchy.

b. German oligarchs financed Hitler.

Polyarchy has decentralized rule with many small governments
tailored to the desires of the local populations.



Fascism is a form of radical authoritarian nationalism
considered by some to be right-wing as its
social conservatism and  authoritarianism are opposite of egalitarianism.

holds total authority over society and seeks
 to control all aspects of public and private life.

Libertarianism wants to limit government power/spending.

Dictatorship has rule by a person.

Federation is composed of states with a common purpose.

U.S. Democratic Federalist Republic

Political Systems involve governments and politics.

government exists when a constitutionally determined government of elected leaders operating according to laws which protect individual rights associated with equality, liberty, property and necessity of consent.

a. There are many adaptations. What constitutes a right and their relative importance has been continually debatable. In the 21st Century some attach Liberal to these ideas.

b. John Adams said "a government, in which all men, rich and poor, magistrates and subjects, officers and people, masters and servants, the first citizen and the last, are equally subject to the laws."

c. In United States v. Cruikshank (1875) the Supreme Court ruled that the concept of "equal citizens" was inherent to Republicanism.

d. Colonial America developed in an untamed vast wilderness far from the governing country. This unique historical circumstance resulted in American Exceptionalism.

Federalism divides powers among member units so that political control is constitutionally decentralized. Each unit has some final authority and self- government.

a. US Federalism divides power with federal/state Dual Federalism. Great Depression hardships led some toward the expanded federal power of Cooperative Federalism.

b. Federalism Video 1.38 is conservative.

c. Federalist Party of Washington, Hamilton and Adams with government fostering economic growth.

d. Political Revolution of 1800 replaced the strong federal government with Jeffersonian Republicanism

Democracy exists when government power resides in a constitutionally determined electorate having equal say in determining the majority will. Majority political power is absolute and unlimited. Success is often determines by controlling Majority Factions. Cnstitution protects minority rights.

See The Federalist Papers, a Basics Video, and Liberalism, Constitutionalism and Democracy.

Abbreviated from Economics 3 Basic Characteristics of_Capitalism Building America's Democratic Federalist Republic 3p

Economic Systems


Economic Systems
Economic systems determine what to produce, how to produce and who will receive production. They must also adapt to changing economic environments. How will America's economic system adapt to changes caused by September 11 is an example.

Adam Smith described early market based
Capitalism in his 1776 book The Wealth of Nations
It described 18th century English capitalism.

See Why is The Wealth of Nations So Important?

A video from    Provided by

Central Characteristics of Capitalism
first described by Adam Smith

Private Property (" Laissez-faire ").  The important Creative Destruction ingredient was observed by mid-20th century sociologist and economist Joseph Schumpeter. It involves the process of technology and improved economic structures replacing inefficient economic structures. The resulting unmatched economic efficiency has led to confrontation among owners, labor, management and government as to who gets resulting income. For his thoughts read Dynamic Economics and listen on YouTube to Schumpeter.


Other Economic Systems

Socialism has collective ownership and management of some economic resources with equitable distributed of resulting production.

Democratic Socialism as practiced in Western Europe had public ownership of key industries such as transportation and communication. Western Europe economies began moving away from socialism toward capitalism in the late 1970's. The change began with England's Prime Minister Margaret Thatcher soon followed by US President Ronald ReaganCapitalism vs. Socialism is a Crash Course Video explores government basics as  does the Laissez fair Capitalism vs. Socialism Video. See Social Democracy.

Feudalism structures society around holding land relationships in exchange for service or labor. New Feudalism refers to a theorized contemporary rebirth of governance, economy and public life reminiscent of a feudal society.

Traditional economy is directed by custom.

Oligarchy is when power rests with a small number of people who may be distinguished by royalty, wealth, family ties, education, corporate, religious or military control. US?

Communism is the ideal of those practicing a "Marxian System." It was designed by 19th century philosopher Karl Marx. Wealth is collectively owned and managed with a planned command economy. The Paris Commune government that led to the anarchy the late 18th century French Revolution has caused many governments and wealthy individuals to fear changes promised by liberal economic systems. Some equate communism with a totalitarian political system as a democratic communism has never existed.

Fabian Economics of British socialist organizations were gradualist. These reformists did not want revolution. In Russia Bolshevik revolutionists eventually won political support over Menshevik gradualists.

Plutocracy is when wealth rules. Used by developing countries, Plutocrats vs. Populist is controversial.  American Dynasty summarizes the Bush family plutocracy. 

Kleptocracy exists to increase the personal wealth and political power of government officials. Russia?

Theocracy has deity

Abbreviated from Economics_3_Basic_Characteristics_of_Capitalism

Modern Capitalism has increasing world-wide competition necessitating up-to-date technology, complex capital goods and a decreasing number of specialized well-trained employees from around the world. 

Economic Rent Seekers increase their wealth using politics. Their influence has replaced that of monarchs and clergy during capitalism's development.
Examples include:
Corporate Capitalism dominated by hierarchical, bureaucratic corporations

2. State Capitalism driven by government as practiced in China,

3. Money Manager Capitalism
creates and
distributed economic rent using financial markets.

4. Crony Capitalism began in "the garden" many years ago.
As a group these participants seek Corporate Welfare.  

Pure Capitalism described by Adam Smith has never been completely put into practice. Instead there have been Mixed Economies combining capitalism and socialism.

Criticism of Modern Capitalism
Ida Tarbell
a Muckraking investigative journalist exposed Standard Oil Trust atrocities. Writing for McClure Magazine and other monthlies, Muckrakers educated the public from 1890 to 1929 Progressive Era. This era demonstrates how the US democratic federalist republic has slowly catered to personal liberty over property interests.

Michael Moore, a modern day investigative journalist, has been critical of capitalism and capitalists. Some question his estimated $50 million net worth.

Philosophical Criticism Readings Why Intellectuals Hate Capitalism
, Is Capitalism Moral? A Commonwealth Club Podcast, Coercive Power of CapitalismCapitalism and Inequality

Political Criticism Readings Why China Does Capitalism Better than the US, Hoodwinked An Economic Hit Man Reveals Why the  World Financial Markets Imploded--and What We Need to Do to Remake Them, by John Perkins, How Will Capitalism End, Has Capitalism Reform Reached a Turning Point, Revisiting Old Argument About Impact Capitalism, Economic Report of the President 2014 is positive, The Great Recession looks at a recent capitalistic failures

Our Democratic Federalist Capitalist Republic

Turning Points in America's Democratic Federalist Republic

Political Economy Readings

Readings Truth Independence- Liberty 12/3/16

See One- Page Class Handouts


2. Building America's
Democratic Federalist Republic


1. The Early Colonial Period
2. Determining Political Power and "We the People"
3. Increasing We" of "We the People"

4. Thomas Jefferson Leader of the Opposition
5. Constitutional History of Our
Democratic Federalist Republic

6. Thomas Jefferson Leader of the Opposition
7. Capitalistic Democracy Profitable Government


3. Elections

Use pdf for color printing.
20th Century Decade Evaluation

Political Eras One 1788 to 1892   pdf
Political Eras Two 1896 to 2016   pdf

Presidential Elections One 1778-1824   pdf
Presidential Elections Two 1828-1852      
   Presidential Elections Three 1856-1892       

Presidential Elections Four 1896-1928   pdf
Presidential Elections Five 1932-72  
Presidential Elections Six 1976-2012    

Economics of Trump's Win 1p


U.S. Government and Politics
Political Economy Readings
One Page Economic Issue


4. Thoughts from Our Leaders

Thomas Jefferson The Art of Power 2012 J. Meacham 8p

American Dynasty Aristocracy, Fortune, and the Politics of Deceit in the House of Bush
 by Kevin Phillips
, 6p

See Welcome the Hackocracy, a look at Bush 2's appointments that made a difference.

Second Chance Three Presidents and the Crisis of America Superpower
 by Zbigniew Brzezinski,
6p summary,

Current Leaders Educational Advise


5. Some Are Unhappy

The Crimes of Post WW2 U.S. Presidents- Noam Chomsky 12 Min Video

Changing Contours of Global Order- Noam Chomsky 77 Min Video

The State of Liberty from EconTalk with
D, Boaz, P. J. O'Rourke, and G. Will Hosted by Russ Roberts 65 min CATO podcast

6. The Flow of History Book Summaries

Don't Know Much About History 
Everything You Need To Know About  American History
But Never Learned
, by Kenneth C. Davis 6p

Turning Points in American History   Over 400 Years Five 2-page parts

Presidential Courage Brave Leaders and How They Changed America 1789-1989
by Michael Beschloss 8p


7. Political Economy Book Reviews

Capitalism in the Twenty-First Century "Why We' re in a New Gilded Age"
Thomas Piketty 2014

The Shifts and Shock What We Learned from the Financial Crisis by Martin Wolf 9/11/14

Seven Bad Ideas How Mainstream Economists Have Damaged America and the World
by Jeff Madrick Reviewed by Peter Richardson 2014

Hoodwinked  An Economic Hit Man Reveals Why the World Financial Markets Imploded--and What We Need to Do to Remake Them, by  John Perkins

Education and Income Inequality, chapter 21 The Age of Turbulence, Adventures in a New World, by Alan Greenspan 

"This Time Is Different" is a history of financial collapse from 1300 to the present. 

Strange Rebels: 1979 and the Birth of the 21st Century.

By Christian Caryl. Basic; 400 pages argues that 1979 belongs to the select club of real turning-points: "years in which one era ended and another was born. 1917 proved to be a bloody dead end and 1848 proved to be, in A.J.P. Taylor’s phrase, “a turning-point in history when history failed to turn”. But others, such as 1789 (when France’s ancient régime collapsed) and 1517 (when Martin Luther nailed his 95 theses on the door), resound down the ages." Editors note: Was the liberalism of the 20th century coming to an end?



"The Shock Doctrine: The evil of “Disaster Capitalism, a book report video was posted to the Crooks and Liars  blog on December 1, 2007

"Nickel and Dimed" On (Not) Getting By in America is a book written by Barbara Ehrenreich. Written from the perspective of the undercover journalist, ...

23 Things They Don't Tell You About Capitalism is critical and a good source of the twenty-three items 

Videos by Ha-Joon Chang
    Part I     Part II     Part III   

The Center Holds Obama and His Enemies
is "the thrilling story of one of the most momentous contests in American history, the Battle Royale between Obama and his enemies from the 2010 midterms through the 2013 inauguration." Video by Jonathan Alter, 2013

Free Trade Doesn't  Work by Ian Fletcher adjunct fellow at the United States Business and Industry Council, and CPA

 In his effective 267 pages of text, Ian Fletcher dissects and often demolishes fundamental teachings about the benefits and risks of trade and replaces them with evidence based updates.  He then recommends a practical alternative based on clear objectives.

Nemesis by Chalmers Johnson from Stephen Lendman of counter currents

"Our democracy and way of life are now threatened because of our single-minded pursuit of empire with a well-entrenched militarism driving it that's become so powerful and pervasive it's now an uncontrollable state within the state."

8. War Politics Book Reviews

Guns, Germs, and Steel -  the fates of human societies '...attempts to explain why Eurasian civilizations, as a whole, have survived and conquered others, while attempting to refute the belief that Eurasian hegemony is due to any form of Eurasian intellectual, moral, or inherent genetic superiority." 

The Limits of Power The End of American Exceptionalism, Bill Moyers sits down with history and international relations expert and former US Army Colonel Andrew J. Bacevich who identifies three major problems facing our democracy: the crises of economy, government and militarism, and calls for a redefinition of the American way of life. The Limits of Power Democracy Now interviews Andrew Bacevich, a conservative historian who spent twenty-three years serving in the US Army.  


How You Can Kill Al-Qaeda in Three Easy Steps review from  Boing Boing  
I just got done reading Howard Clark's new book "How You Can Kill Al-Qaeda (in Three Easy Steps). He's an ex-Marine and former Homeland Security adviser who says the way to win the war on terrorism is to help empower the mainstream Muslim community, who in recent years has been overshadowed in the public spotlight by fringe Al-Qaeda extremists. The whole idea of fighting terrorism with ideas and not weapons is definitely nothing new, but Clark's populist tone and foreign policy street cred was a refreshing perspective to have in the discussion. "Click on the link below in the next 30 minutes and I'll throw in this egg slicer absolutely free! Here's how to order!" Book's official site...  

One Nation Under Contract: The Outsourcing of American Power and the Future of Foreign Policy
In this CSPAN2 book interview,  Allison Stanger talks of her book which looks at the increasing use of private contractors by the U.S. government and argues that with proper oversight contractors can be valuable tools for carrying out our foreign policy.  Includes audience Q&A.