Abstract
This chapter examines the political economy of industry, which we define as the relationship between production organisation and the power structure it generates. The political economy approach to industry highlights production organisation and its effects on both productivity and the dynamics of the whole economic system. More specifically, production organisation determines division of labour and its effects on workers’ specialisation and their modes of employment. This also determines how workers’ ‘skill, dexterity and judgement’ (Smith) can be applied and has important consequences for the distribution of power in societies. The chapter builds on the contributions of Classical Economists and applies the classical framework to explaining current evolutions in manufacturing. Particular attention is given to the work of Adam Smith, who is seen as the forerunner of a modern approach to the political economy of industry.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The analytical implications of this view of division of labour are investigated in Luigi Pasinetti’s model of a ‘pure labour economy’ (1993).
- 2.
Bianchi and Labory (2018) provide the analytical reconstruction of the sequencing of industrial revolutions in terms of a succession between different forms of manufacturing organisation (manufacturing regime).
- 3.
References
Askenazy, P. 2001. Innovative Workplace Practices and Occupational Injuries and Illnesses in the United States. Economic and Industrial Democracy 22 (4): 485–516.
Audretsch, D.B., and M.P. Feldman. 1996. Knowledge Spillovers and the Geography of Innovation and Production. American Economic Review 86 (3): 630–640.
Babbage, C. 1832. On the Economy of Machinery and Manufacture. London: Charles Knight.
Bailey, D., and L. De Propris. 2014. Reshoring: Opportunities and Limits for Manufacturing in the UK—The Case of the Auto Sector. Revue d’économie industrielle 145: 45–61.
Bain, J.S. 1959. Industrial Organization, 2nd ed., 1967. New York: Wiley.
Becattini, G. 1979. Dal “settore” industriale al “distretto” industriale. Alcune considerazioni sull’unità d’indagine dell’economia industriale. Rivista di economia e politica industriale 1: 7–21.
Bianchi, P. 1984. Divisione del lavoro e ristrutturazione industriale. Bologna: Il Mulino.
Bianchi, P. 1991. Produzione e potere di mercato. Roma: Ediesse.
Bianchi, P. 2013. Bain and the Origins of Industrial Economic. European Review of Industrial Economics and Policy 4.
Bianchi, P., and S. Labory. 2011. Industrial Policy after the Crisis. Seizing the Future. Cheltenham: Edward Elgar.
Bianchi, P., and S. Labory. 2018, forthcoming. Manufacturing Regimes and Transitional Paths: Lessons for Industrial Policy. Structural Change and Economic Dynamics.
Black, S., and L. Lynch. 2001. How to Compete: The Impact of Workplace Practices and Information Technology on Productivity. Review of Economics and Statistics 83 (3): 434–445.
Chamberlin, E.H. 1933. The Theory of Monopolistic Competition. Cambridge, MA: Harvard University Press.
Chamberlin, E.H. 1948. An Experimental Imperfect Market. Journal of Political Economy 56 (2): 95–108.
Chandler, A. 1977. The Visible Hand: The Managerial Revolution in American Business. Cambridge, MA: Harvard University Press.
Coe, N.M., P. Dicken, and M. Hess. 2008. Global Production Networks: Realizing the Potential. Journal of Economic Geography 8 (3): 271–295.
Dahrendorf, R. 1988. The Modern Social Conflict. An Essay on the Politics of Liberty. New York: Weiden & Nicolson.
Dasgupta, P., and J. Stiglitz. 1980. Industrial Structure and the Nature of Industrial Activity. Economic Journal 20 (358): 266–293.
Freeman, C. 1995. The National System of Innovation in Historical Perspective. Cambridge Journal of Economics 19: 5–24.
Georgescu-Roegen, N. 1970. The Economics of Production, The American Economic Review 60 (2): 1–9 (Papers and Proceedings of the Eighty-second Annual Meeting of the American Economic Association, May 1970).
Gereffi, G. 1994. The Organisation of Buyer-Driven Global Commodity Chains: How U.S. Retailers Shape Overseas Production Networks. In Commodity Chains and Global Capitalism, ed. G. Gereffi and M. Korzeniewicz, 95–122. Westport, CT: Praeger.
Gilbert, R.J., and D.M.G. Newbery. 1982. Preemptive Patenting and the Persistence of Monopoly. American Economic Review 72 (3): 514–526.
Harris, J. 1757. An Essay Upon Money and Coins. London: G. Hawkins.
Hume, D. 1739. A Treatise of Human Nature, ebook (2010). https://www.gutenberg.org/files/4705/4705-h/4705-h.htm.
Labory, S. 2002. A Firm’s Organisation and Its Implications for Market Performance. Economia Politica XIX (2): 259–276.
Landesmann, M. 1986. Conceptions of Technology and the Production Process. In Foundations of Economics, ed. M. Baranzini and R. Scazzieri, 281–310. Oxford: Blackwell.
Landesmann, M., and R. Scazzieri. 1996. Production and Economic Dynamics. Cambridge: Cambridge University Press.
Lessig, L. 2004. The Innovation Commons. In The Governance of Knowledge, ed. N. Stehr, 227–239. London and New Brunswick: Transaction Publishers.
Liverani, M. 2006. Uruk. The First City. London: Equinox.
Lundvall, B. (ed.). 1992. National Innovation Systems: Towards a Theory of Innovation and Interactive Learning. London: Pinter.
Mandeville, B. 1714. The Fable of the Bees: Or, Private Vices, Publick Benefits. London: Printed for J. Roberts.
Marshall, A. 1890. Principles of Economics. London: Macmillan.
Marshall, A. 1919. Industry and Trade. London: Macmillan.
Marx, K. 1844. Economic and Philosophical Manuscripts.
Marx, K. 1976. Capital, 1st ed., 1867, vol. 1. Harmondsworth: Penguin.
Modigliani, F. 1958. New Developments on the Oligopoly Front. The Collected Papers of Franco Modigliani. Cambridge: MIT Press.
Nelson, R.R., and S.G. Winter. 1982. An Evolutionary Theory of Economic Change. Cambridge: Harvard University Press.
Noble, D.F. 1984. Forces of Production: A Social History of Industrial Automation. New York: Knopf.
OECD. 2014. Global Value Chains: Challenges, Opportunities, and Implications for Policy, Report. https://www.oecd.org/tad/gvc_report_g20_july_2014.pdf. Accessed 21 Jan 2017.
Osterman, P. 1994. How Common is Workplace Transformation and Who Adopts It? Industrial and Labour Review 47 (2): 173–188.
Pasinetti, L.L. 1993. Structural Economic Dynamics. A Theory of the Economic Consequences of Human Learning. Cambridge: Cambridge University Press.
Pasinetti, L. 1999. Economic Theory and Technical Progress. Royal Economic Society Conference, March 31.
Pasinetti, L.L. 2005. The Cambridge School of Keynesian Economics. Cambridge Journal of Economics 29 (6): 837–848.
Penrose, E. 1959. The Theory of the Growth of the Firm. New York: John Wiley and Sons.
Petty, W. 1671. Discourse in Political Arithmetick (Published in 1690). https://www.marxists.org/reference/subject/economics/petty/ downloaded on 25 September 2015.
Pinch, S., H. Nick, J. Mark, and T. Stephen. 2003. From “Industrial Districts” to “Knowledge Clusters”: A Model of Knowledge Dissemination and Competitive Advantage in Industrial Agglomerations. Journal of Economic Geography 3: 373–388.
Poni, C. 1997. Fashion as Flexible Production: The Strategies of the Lyon Silk Merchants in the Eighteenth Century. In World of Possibilities: Flexibility and Mass Production in Western Industrialization, ed. C.F. Sabel and J. Zeitlin, 37–74. Cambridge: Cambridge University Press.
Poni, C. 1999. The Circular Silk Mill. A Factory Before the First Industrial Revolution. History of Technology 21: 65–85.
Porter, M. 1990. The Competitive Advantage of Nations. London: Macmillan.
Robbins, L. 1978. The Theory of Economic Policy in English Classical Political Economy. London: Macmillan.
Scazzieri, R. 1981. Efficienza produttiva e livelli di attività: un contributo di teoria economica. Bologna: Il Mulino.
Scazzieri, R. 1993. A Theory of Production: Tasks, Processes and Technical Practices. Oxford: Clarendon Press.
Scazzieri, R. 2014. A Structural Theory of Increasing Returns. Structural Change and Economic Dynamics 29: 75–88.
Schumpeter, J.A. 1934. The Theory of Economic Development. An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Cambridge, MA: Harvard University Press.
Senior, W.N. 1836. An Outline of the Science of Political Economy. London: Clowes and Sons.
Smith, A. 1776. An Enquiry into the Wealth of Nations, 2 volumes. London: J.M. Dent & Sons Ltd. (reprinted in 1960).
Sraffa, P. 1926. The Law of Returns under Competitive Conditions. The Economic Journal 36 (144): 535–550.
Sraffa, P. 1930. A Criticism and A Rejoinder. Symposium ‘Increasing Returns and the Representative Firm’. The Economic Journal 40 (157): 79–116.
Stigler, G.J. 1957. Perfect Competition, Historically Contemplated. The Journal of Political Economy 65 (1): 1–17.
Sturgeon, T.J. 2002. Modular Production Networks: A New American Model of Industrial Organization. Industrial and Corporate Change 11 (3): 451–496.
Sturgeon, T.J. 2008. From Commodity Chains to Value Chains: Interdisciplinary Building in an Age of Globalization. Working Paper, Sloan Industry Studies, WP-2008-2.
Sylos Labini, P. 1962. Oligopoly and Technical Progress. Cambridge: Harvard University Press.
Tucker, J. 1755. The Elements of Commerce and Theory of Taxes. Bristol (Issued from Bristol 10 July 1755. Printed but not published).
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Bianchi, P., Labory, S. (2018). The Political Economy of Industry. In: Cardinale, I., Scazzieri, R. (eds) The Palgrave Handbook of Political Economy. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-44254-3_13
Download citation
DOI: https://doi.org/10.1057/978-1-137-44254-3_13
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-44253-6
Online ISBN: 978-1-137-44254-3
eBook Packages: Economics and FinanceEconomics and Finance (R0)