Changes in the Relationship between Politics and Economics
The 2008 financial crisis drew increased attention in the social sciences to the relationship between politics and economics. The findings of related work, initially on analyses of the financial crisis and subsequently on regulation of the financial system, were published in two volumes. The financial crisis itself and the ensuing attempts at reform in response to it raise a number of theoretical questions that can be discussed in the field of Political Economy. “Political Economy” dates back to the eighteenth century and experienced a revival after the 1970s. The relationship between polity and economy – two of the subsystems of society according to systems theory in social science – became the critical source of social dynamism after the end of the Second World War. The unexpected 2008 financial crisis could be explained as a contingent, socially defined, but not socially determined outcome of a process in which different economic and political mechanisms worked together in a specific historical situation. The process-tracing approach in political science attempts to analyze such processes empirically. As the theory of the relationship between politics and economics is developed, it attempts to analyze the intertwined national and transnational dynamics in a contemporary context.