From Mixed Economy to Entangled Political Economy: a Paretian Social-Theoretic Orientation

MEG PATRICK, RICHARD E. WAGNER
PUBLIC CHOICE 164.1-2 (2015): 103-116

Abstract: This paper compares and contrasts two visions of political economy. These visions aren’t antagonistic, just different. The mixed economy vision associated with Ludwig von Mises and Sanford Ikeda treats politics as intervening into markets. The entangled political economy vision treats politics and markets as overlapping subsystems within a society. Entangled political economy thus descends from a theory of society and social processes. Similarly to quantum entanglement where the state of a particle cannot be described independently of that of other particles, entanglement in political economy means that rational market action cannot be defined independently of rational political action. The focal point of entangled political economy, moreover, is on individual actors and their search for gain within different action environments. Interaction among individuals across those environments generates societal tectonics, thereby adding insights from Vilfredo Pareto about social theory to those of Mises and Ikeda about interventionism.