Loyola political science professor discusses political economy and how it relates to our daily lives
Joan Ricart-Huguet, Ph.D., associate professor of political science, is an expert on political economy, African politics, and comparative politics. He has been awarded the David and Helen Kimble Prize from the Journal of Modern African Studies and the Luebbert Best Article Award from the American Political Science Association.
This summer, Ricart-Huguet helped inspire the theme of political economy for NPR’s podcast, hosted by Robert Smith, and appeared on three episodes, including one recorded in studio at NPR’s headquarters in Washington, D.C.
In this Q&A, he defines political economy and discusses its relevance to everyday life.
Can you define the term “political economy” and explain how it impacts our daily lives?
Political economy studies how the economy affects political outcomes, such as elections, and also how governments, laws, politicians, and institutions affect the economy, for example economic growth and the business environment. Government and business are not exactly two sides of the same coin, but it really is difficult to understand one without the other, to understand the public sector if you know nothing about the private sector and vice versa.
What is the government’s role in regulating the economy?
I discussed this in the of NPR’s Planet Money Summer School, which begins with the basic concept that government regulation is necessary in any complex society. Therefore, the question is not whether there should be government laws and regulations, but how and how much a government should regulate economic activity. The focus of our discussion was intellectual property (IP) rights, one kind of regulation. IP rights are a big thing in most advanced societies, especially the ones that innovate. Whether it’s a new car design or a COVID-19 vaccine, there is some trade-off between the absence of IP rights and very extensive IP rights.
For example, if there were no patents at all, you would likely lower the incentives of people and companies to engage in the kind of innovation that takes years to commercialize because, if someone can copy the idea right away, inventors would have no guarantee of a financial return. At the same time, patents can reduce innovation if they allow people and firms to live off their economic rents for a long time.
The episode discussed some good examples of intellectual property rights dilemmas. Can you share one?
A funny one is whether new cuts of meat, like steaks, can be patented, and it turns out they have been in the U.S. The social benefits of this “innovation” are far from obvious compared to drugs, and I think many other countries wouldn't grant a patent for that.
In the fifth episode of NPR’s Planet Money Summer School, you discussed industrial policy. Can you explain its importance and impact?
Industrial policy refers to economic policies adopted by the government to influence domestic industries via subsidies, tax breaks, tariffs, and trade policies with the goal of industrializing the country, of fostering economic development. The particular industrial activity the government wants to encourage could be shoemaking, semiconductor chips, or anything in between. All those activities can be affected by industrial policy if the government rolls out some kind of targeted effort to promote that industry, protect it from international competition, or encourage it to export globally.
, we talked about how Argentina passed legislation requiring companies to manufacture products in Argentina, famously Blackberry devices. But Argentina does not have a history of producing cell phones or other advanced communications technology. The cellphones made in Tierra del Fuego were expensive and, by the time they were on the market, they were outdated. You had people coming from the U.S. with smart phones in their socks because they could sell them in Argentina and make a profit. The Argentina case is an example of industrial policy that was ill-conceived. To go up the value chain they should have focused on heavier industry, which is something they have more experience with even if it's less "fancy” because it is not cutting-edge technology.
What is an example of successful industrial policy?
The solar power energy market, namely solar panels, was not dominated by China 20 or 30 years ago. Today, China produces around 80% of solar panels in the world. How did that happen? In part because of Chinese entrepreneurs, but also because the Chinese government consciously promoted the expansion of the domestic solar panel industry. China produces stuff in large quantities because the domestic market is so large, so they benefit from economies of scale. The government subsidized firms until they became worldwide leaders in solar panel technology. So, it was a successful case from the point of view of China’s government because now its companies have market power. The same is true for rare earth elements, over 80% are processed by Chinese companies. That gives the Chinese government much leverage in the current trade negotiations with the United States and Europe. This helps explain why the U.S. and many European countries—where industrial policy has been limited in the 21st century—argue that Chinese government subsidies to its firms are unfair.
How do you teach these topics in the classroom and why do you find students are curious about this?
I think one of the many reasons political science students—and students in other social sciences like economics—come to Loyola is because we are close to three important cities at the local, state, and federal level: our Evergreen campus is located right here in Baltimore, and we are also next to Annapolis and Washington, D.C.
My course Political Economy of Development explores some of these issues. In the spring, I will be teaching a new seminar called Political Leadership, where we’ll go beyond political institutions and examine political leaders instead, including their effects on the economy. For example, are more educated leaders better for a country’s growth? Do political leaders tend to come from a certain socioeconomic background?
You recorded a bonus episode on Planet Money+ where you discussed some of the topics you are most interested in. What was that conversation like?
We talked about social capital—the social connections of individuals and groups that help them achieve their goals—which is in many ways the fabric of society. Political scientist Robert Putnam is the biggest name on the topic. In the U.S., we have a lot of bonding social capital—ties between people who share interests or a socioeconomic background—but not a lot of social capital that bridges divides between different groups, what is known as bridging social capital. Putnam illustrated that in his book, Bowling Alone: The Collapse and Revival of American Community in 2000, but the findings are more relevant than ever. Bowling leagues are this great example of a cross-class activity, but he found they had lost prominence over time. A decrease in bridging social capital feeds political polarization.
What was your favorite part about participating in this “semester” of the Planet Money podcast?
It’s just a lot of fun to talk to serious journalists who engage professors to make sense of the world around us. My favorite part was simplifying hard concepts so that NPR listeners who may have no background in political economy can nonetheless see their usefulness.
What is one piece of advice you would give to current or prospective students interested in political economy?
Political economy provides many answers to questions about both government and the economy, so I would encourage business and economics majors to at least minor in political science and the other way around as well. That will improve their understanding of society, and it will help both their personal growth and their success in the job market, whether they choose to work in the public, private, or non-profit sector!