Political Economy: During Santa Monica's Socialist Perspective

Core Definition from Santa Monica Instruction

Political economy was defined as:

"Free trade based on the economic model permitted by the state"

with particular focus on North-South relations.

Context: Socialist Leadership in Santa Monica

This instruction occurred in a city governed by a socialist-leaning council, reflecting:

• A view of the state as the primary economic architect
• Belief that markets operate within politically determined parameters
• Rejection of laissez-faire as a political choice rather than natural state

Breaking Down the Definition

1. "Permitted by the state"

This socialist perspective emphasizes:

• All economic systems are political constructions
• The state determines property rights, regulations, and wealth distribution
• "Free trade" exists only within state-sanctioned boundaries
• Contrasts with libertarian view of markets as self-regulating natural systems

2. "Economic model"

Refers to the fundamental design choices:

• Who owns productive assets (private vs. public ownership)
• How resources are allocated (market vs. planning mechanisms)
• Degree of redistribution through taxation and social programs

Focus on North-South Relations

This global perspective examines:

• Historical patterns of unequal exchange between developed (North) and developing (South) nations
• How international institutions (IMF, World Bank, WTO) shape economic possibilities
• Dependency theory: How Southern economies remain providers of raw materials to industrialized North
• Socialist solutions like import substitution industrialization (ISI)

Socialist Critique of Traditional Free Trade

Issue	Socialist Perspective	North-South Dimension
Free Trade Agreements	Often favor powerful nations and corporations	Lock Southern nations into disadvantageous terms
Market Access	Northern markets remain protected while demanding Southern openness	Agricultural subsidies in North undermine Southern farmers
Debt Structures	Debt as mechanism of control	Structural Adjustment Programs force Southern austerity
Intellectual Property	Knowledge monopolization	Prevents technology transfer to South

Connecting to Your Political Philosophy Class

This perspective aligns with your earlier study of Marx as a critic of liberalism:

Marxist Underpinnings

• The state isn't neutral - it protects class interests
• Current "free trade" systems maintain global power imbalances
• True economic freedom requires transforming state structures

Contrast with Mill's Liberalism

Concept	Mill's Liberal View	Santa Monica Socialist View
State's Economic Role	Nightwatchman (minimal intervention)	Architect (active design and permission)
Free Trade	Natural and beneficial when unimpeded	Political construction favoring powerful actors
Global Justice	Achieved through market integration	Requires fundamental restructuring of power
Development Path	All nations follow similar modernization	Structural barriers prevent Southern development

Santa Monica's Practical Applications

This philosophy manifested in local policies:

• Living Wage Ordinance: Among nation's highest minimum wages
• Rent Control: Direct market intervention for housing justice
• Community Benefits Agreements: Requiring private developers to fund public goods
• Worker Cooperatives: Support for alternative ownership models

Key Insight

The instruction reveals how socialist governance uses municipal policy as:

• A laboratory for alternative economic models
• Resistance to neoliberal globalization trends
• Proof that "permitted by the state" includes local/regional experimentation