A Note on Political Economy  

Professor Timothy Earle (2002:1) defines the subject in this fashion, “The political economy is the material flows of goods and labor through a society, channeled to create wealth and to finance institutions of rule.”  I would put it slightly differently.  To my mind a political economy is the political institutional frame created to control the flows of goods and labor through a society.  The institutions are created by assertive men, in part, to enable them to siphon off value from these flows.  In a strict sense, the flows are the economic part of the political economy, while the institutional frame created by politicos is its political aspect.

In effect, it is important to see political and economic institutions as entertwined (North 1990, Acheson 1994, Ensminger 1996).  The thrust of the work of these theorists is that political activity and that of the economic sphere overlap and should be considered as a unit.  As Earle (2002:7) puts it, “I seek to explain how complex political institutions were established based on certain economic options to intensify and mobilize surplus.”  In most societies, then, the political actions of politicos cannot be divorced from economics.

Before we begin let me explain my use of some unique terms dealing with political economy.  Poleconomics (sing. poleconomic) is my term for the behavioral combination of the political and economic.  I say “behavioral political economy” because I want to stress that the kinds of poleconomic cases I present indicate that aggressive persons act in ways that link the pursuit of wealth with power.  It is not simply a theoretical association that I intend to show; but rather men in powerful positions in society using their offices to siphon labor value from the general public.  Since the advent of the development of a storable-stealable-surplus[1] the politics and economics have been historically and socially linked.  At a theoretical level, wealthy individuals in society may access politicos from time to time to attempt to influence political processes, although such is not the focus of this book.

Although I will focus largely on ancient societies in the majority of the book, and most of my cases will deal with aggrandizing (self-seeking) men using political power and authority to access wealth, sometimes in history economic clout is used to influence already extant governments, as we will see in our first case taken from the modern world:




Case I.1  The Diamond Invention of DeBeers


From the very beginning of DeBeers Consolidated Mines and the Anglo American Corporation of South Africa, with its founder Cecil Rhodes (1853-1902), the company used its economic clout to influence government officials in order to establish and maintain a monopoly on the world’s diamond production and distribution (Epstein 1982).  This was done in official ways and also behind closed doors.  Harry Oppenheimer (1908-2000), Chairman of DeBeers Consolidated Mines (1960-1983) is quoted as saying, “If you are involved in large business enterprise, you’ve simply got to concern yourself with politics: it is not realistic not to do so” (Epstein 1982:111).

At every emergence of any threat to the cartel’s monopoly the Oppenheimers moved to take whatever means, some legal others shady, to squash the competition.  In the beginning most of their competitors were in Africa, which was still under the grips of colonialism, so DeBeers worked easily with the officers of the European colonial governments.  The Oppenheimers were well connected with the London élite and the Colonial Office and they had a lot of wealth to lubricate those associations. 

With the emergence of many new independent African governments in the 1960s maintaining the cartel’s vice grip on the flow of diamonds became somewhat more difficult to maintain but the Oppenheimer strategy was not aimed at misleading the African governments themselves; but rather they simply co-opted the officials of the newly formed governments. (Epstein 1982:117).  Again, their monopoly provided them with plenty of money to do so.  It was a beautifully vicious circle for the DeBeers family – the more money they made the more influence they could exert on governments, corporations and individuals in order to make more money.

The express function of the cartel was to siphon off value from consumers by maintaining a needlessly high value of diamonds, which after all are basically pressurized carbon rocks that have no intrinsic value beyond that fabricated by those intent on selling them.  This was the job of the Oppenheimers and their Diamond Services staff at 44 Main Street, Johannesburg, South Africa:


Diamond Services is in reality Oppenheimer’s staff for running the diamond cartel.  It is composed of only about a dozen men.  The strategic objective of the staff is to preserve the delicate equilibrium between the world supply and world demand for diamonds.  To achieve this balance, the staff used its detailed knowledge of all diamond prospecting possibilities to determine when new diamond mines will be brought into production – or closed – and the level of production.  It also formulates plans for dealing with possible competitors, either by making arrangements with them or buying them out directly.  And it closely monitors all aspects of the far-flung diamond business (Epstein 1982:117).


This political economy was begun by Rhodes in the waning years of the 19th century; but even today high quality diamonds flow upwards from the DeBeers mines in South Africa to a limited number of handpicked wholesalers who buy uncut diamonds and have them cut, then sell them to retailers, who in turn sell them to private customers.  This pipeline involves a network of brokers, diamond cutters, bankers, distributors, jewelry manufacturers, wholesalers and diamond buyers for retail stores.  

The Diamond Invention of this corporate political economy rests on three legs: production, distribution and diamond cutting, all of which needs careful attention by the executive branch of DeBeers.

The main limiting link is that between DeBeers and its small cadre of wholesalers.  By keeping the number of these middlemen low, DeBeers can more easily control the flow of diamonds.  The cartel also controls the flow of industrial diamonds through its shell companies that make the only available drilling equipment that can be used by foreign mines.  If they want the drilling equipment they must sell their diamonds back to DeBeers.  Some of these shell companies also make diamond abrasive powders that are sold to industrial customers.  This gives DeBeers almost total control of the global diamond industry.  That control, enabled by massive profits from their monopoly, allowed DeBeers to influence governments, corporations and significant individuals important to the diamond producing world.

This control of the flow of diamonds has been accomplished through a set of interlocking companies that could swiftly and sometimes stealthily squash or co-opt any competitor.  For example, in 1967 South Africa’s nationalist government conducted a secret survey of the Oppenheimer empire’s holdings and found that it exercised direct control over 900 major corporations in South Africa alone (Epstein 1982:119).  From 44 Main Street, Johannesburg, the Oppenheimer family orchestrated and still exercises monopolistic control through these front companies, the feelers of which still extend around the globe, influencing politics at every turn.

The Diamond Invention rested on two principles: first, as illustrated above, the Oppenheimer cartel had to control the flow of diamonds around the globe.  Secondly, they had to create and maintain the illusion that diamonds were highly valuable.  As such, they should be bought and held i.e., to prevent people from re-selling diamonds DeBeers orchestrated an advertizing campaign expressly intent on convincing the buying public to buy and hold onto diamonds.

The cartel was, in effect, a well-organized political economy, one bent on influencing officials when needed; but also an organization intent on manipulating the minds of the public, the psyche of the diamond buyer.  Epstein writes, “What was necessary was the creation of a mass mentality in which women would perceive diamonds, not as precious stones that could be bought or sold according to economic conditions or fashions; but as an inseparable part of courtship and married life” (1982:121).  The twin strategy of the cartel was to limit supply and increase demand.

Men in powerful official positions or in corporations sometimes have to create images in the minds of the general public, just as politicians sometimes do.  For political office-holders, this means creating and maintaining legitimacy, the general idea that they have the right to rule.  In the DeBeers case, the Oppenheimer cartel had to romanticize diamonds to simulate demand and did so in the following ways:


  • They hired a Madison Avenue advertizing firm to create an image of diamonds in the public psyche;


  • They approached the film studios in Hollywood and succeeded in getting the film moguls to present diamonds in their movies in a positive light;


  • During World War II they connected diamonds to the war effort with wire service stories such as “How Diamonds Spark the Wind of War and Peace” and “Diamond, King of Gems, Reigns Supreme Despite War;”


  • They connected diamonds with love, courtship and marriage;


  • They went after middle-aged buyers, those already married, to convince them that the husband should continue to buy diamonds for his wife to reinforce his love for her;


  • They organized lectures in schools;


  • Their ad agency successfully connected “screen stars” and socialites with diamonds;


  • They set about exploiting the relatively new medium of television by arranging for female stars and celebrities to appear on camera wearing diamonds;


  • They created catchy phrases in their ads e.g., “A Diamond is Forever,” which became the official mantra of DeBeers;


In the cases that follow throughout this book we will see political economies in which aggrandizing men exercise political and military power; but also cases in which power comes from words and images carved in stone or painted on temple walls.  We will see the concerted efforts of scribes, scriptwriters and public relations experts, all intent on influencing the thought processes of their publics.  In a very real way, the gloved-fist of power, if it is to prevail on a permanent basis, must weild a chisel or a paint brush or a quill or – more recently – a press conference.  While a diamond may be “forever,” political and economic power is ephemeral and needs to be created and re-created, whether it is chiseled into a stone obelisk, painted on an Egyptian tomb, copied down in a campaign speech or sent out over the airwaves from the seats of power.  At its very base a political economy is about controlling information.




I take political to be concerned with the exercise of power and economics as those human endeavors concerned with material provisioning (Marshall 1930 [1890]).  Weber defined power as “the probability that an actor in a social relationship will be in a position to carry out his own will despite resistance” (1978:53), although the kinds of power I wish to emphasize will be described below. 

I think poleconomy (political economy) better describes the reality of the sources of domination, as those with political power tend to have access to economic resources beyond the average person; and those with great wealth tend to have abnormal access to political power, as we will see in Case I.1. The Diamond Invention of DeBeers.  Yet I will mostly use the more accepted “political economy” throughout this book.  Nevertheless, with an occasional insertion of the terms poleconomics or poleconomy I am trying to get the reader to see that political and economic aggrandizement go hand-in-hand, as we will see in our journey through the history of the last twelve thousand years.

Political economy in the classical tradition came into fashion as an analytical concept with Adam Smith’s Wealth of Nations (1776) and was fashionable until the death of Karl Marx in 1883.  Both men had a mechanistic view of society.  For example, Adam Smith noted that civilization came into being as a result of profit-seeking behavior, the unintended consequence of actions taken for purely private purposes.  Famously, he wrote that society operated almost as if there was an “unseen hand” at work. 

Marx also viewed civil life as evolving out of modes of production, not because of the actions of any small group of individuals.  In both writers, we saw political economy as emerging as a naturally-wedded couple in a manner that is at such a high theoretical level that real action is not the focus.

The reader will come to see that I take an agency approach to sociocultural change i.e., the actions of the aggrandizing few in societies with an economic surplus tend to fashion the social, political and economic nature of society.  In short, they create the nexus between the political order and economics, a linkage that colors the formation of all social institutions.

Whereas Adam Smith saw the work of the “invisible hand” of the market serving the public good by increasing the “general industry of society” or directing that industry in “the most advantageous direction,” I question whether such change has been entirely beneficial for most members of society.  On the contrary, when the distribution of power and goods was made in the various cases I present in this book the reader should ask:  Was this for the good of most members of society or did it benefit a few disproportionately?  Furthermore, did the unequal provisioning of the few by the political economy actually act to harm the many, while the few profited? 

The classical theory of value found in the writings of Adam Smith, Karl Marx and others who were concerned with the concept of political economy dealt with the concept of an economic surplus.  This was seen as the amount of goods left over once the costs of production were fully taken into account, the fund out of which profit and investment arose.  As I have indicated, the mechanistic approach to political economy tends to leave out, or at least minimize, the agency of powerful actors in dealing with the surplus.  I am more inclined to see political economy as a nexus between the exercise of power and the accumulation of wealth that creates a distribution of wealth that is the outcome of a struggle between competing claimants, not something inherent in the structure of reproduction itself, as the classical thinkers on political economy would have it.

For Adam Smith there was no such struggle, or if there was, the outcome was inevitable and beneficial for all.  For Marx the struggle was a highly abstract interaction between social classes, as he focused on capitalism (Dobb 1936).  But I am going back into prehistory and focusing more on the emergence of political economy in the embryonic years of the Neolithic, before formal classes emerged.  However, my analysis should not be seen as antithetical of the Marxian view; but rather as complementing it.  The perspective of Marxists is nicely summed up by Caporasco & Levine (1992:55) when they write:


Marxists have seen the political in the very separation of civil society from the public arena (limiting rights and equality to the latter), the class process by which surplus value is “appropriated” under capitalism, the role of the state in managing the interests and affairs of capital, political (that is state-backed) guarantees of property rights, revolutionary activity to alter the political institutions of capitalism, and the bargaining between labor and capital for control of the economic surplus.


That is not an incorrect theoretical position, merely a limited one.  Since the appropriation of the economic surplus began long before the emergence of capitalism or formal classes (Earle 1986, 1987, 1991a, 1991b, 1997, 2000, 2002).

In my analysis I tend to write of “appropriation” as “siphoning,” the process by which élites used, and continue to use, political authority to extract economic value from those with less power.  In so doing, I am not in conflict with Marxian theory so much as attempting to extend the analysis into early historic societies, the data and theory of which has largely been developed by anthropologists and historians since the death of Marx.

Furthermore I want to bring to the investigation of the political economy of societies with surplus production the concept of agency (Archer 1996), which is lacking in the mechanistic approaches of the classical theorists.  As with the classical views of political economy, I am concerned with reproduction of institutionalized forms, both political and economic; but I will focus more on the private interests of key actors in the political economy and the outcome of such interests for society at large. 

For Adam Smith the pursuit of private interests created the economic structure, whereas for Marx “causation runs in the other direction” (Caporasco & Levine 1992:6).  In the mechanistic approach of both theorists, the economic structure is the result of the unplanned and uncontrolled acts of individuals.  I will focus on the planned acts of aggrandizing élites in their formation of a political economy that throughout history created inequality.  These élites had interests and the power to pursue them, which led to acts that were contrary to the interests of the masses.  Such processes continue today, as I will show in the last cases in this book (Case 10.1., Case 10.2., & Case 11.1).

From the rise of the first corporate groups in the Agricultural Revolution, and especially with the advent of chiefdoms, the economy and politics were wedded forever.  When I use the term political I am referring to the institutionalized power that exists in a given society.  As you will see in this present work, this began with the advent of a storable-stealable-surplus.

Economy, in the Greek usage, referred to household management (Caporasco & Levine 1992:1).  This was the only management level of wants and needs among non-storing societies of the Paleolithic. No formal political structure existed; hence it could not be linked to material provisioning.  Political economy only emerged when, in the presence of stores of wealth, aggrandizers (self-promoters) assumed the affairs of managing wealth distribution and the fulfillment of human wants and needs.  The rise of political economy linked persons otherwise independent, initially clumping them into corporations e.g., kin groups and chiefdoms. 

With the advent of political economy the individual, to satisfy his wants and needs, now had to depend on persons outside his immediate circle of kin – society’s managers.  With the initiation of stored wealth came new boundaries of want-satisfaction, which had forever become political, since responsibility for wealth distribution had become linked to public authority outside of domestic groups.  In other words, when humans began to store wealth –or to put it another way – when they began to accumulate significant property, especially land, the economy could no longer be seen as a separable system, independent of political officers.

Among theorists who work with the political economy of the state, economics and politics are seen as analytically distinct (Caporasco & Levine 1992:7) but if we look back into the Paleolithic bands who lacked stores of wealth we can say that it is also historically distinct in that institutionalized power (authority) was absent for most of human existence, although Paleolithic peoples had economic behavior.

Among non-storing peoples of the Paleolithic there were neither powerful officers nor formal political groups to administer the fulfillment of economic wants and needs contrary to the wishes of the individual, although there were generalized norms of sharing that influenced the distribution of food.  All other material goods in nature[3] were equally available to all band members.  With the materialization of an official domain, rights began to be defined by others holding institutionalized offices e.g., corporate group headmen and chiefs.  Thus, my approach to political economy is in disagreement with the classical theories that defined political economy as sui generis.  Rather, it was formed by the actions of assertive men.

If we are going to deal with political economy in this book then we must be clear on how I use the twin concepts contained therein – political and economic.  There are a variety of ways in which social scientists have defined “political.”  I see it as synonymous with institutionalized power or structural authority and furthermore I see these patterns of power as a limited good for which self-promoters compete (Morgenthau 1960 [1948]; Dahl 1956).

Presumably in non-storing Paleolithic peoples some band members used personal power to persuade and influence others; but there were no institutionalized officers of public authority to deal with conflicting interests through public policy – no “political” in the strict sense (Crick 2005 [1964]).  We get “strictly political” once we have a surplus of wealth in society that permitd the rise of institutions of public authority. 

In the first instance, then, there were societies without institutionalized rulers – without government (Middleton & Tait 2004 [1958]).  Politics as government did not come into being until aggrandizers began to construct the social relations of power i.e., authoritative structures.  As we will see, “government” first began in the formation of power relations within corporate kin groups and sodalities (see chapter 4), that is with laws governing who gets what, when, and how (Lasswell 1936).  Political economy began, then, first within kin groups and sodalities; but became greatly expanded with the rise of regional chiefs.


The Questions at Issue

There are six key concepts that I will present in this work:

(1)        Domination;

(2)        Inequality (stratification);

(3)        Scripting (fabrication);

(4)        Mystification;

(5)        Secrecy;

(6)        Malfeasance in office.

Anthropological research has shown that institutionalized domination leading to inequality (or stratification) is pervasive in human societies.  Why do a few men dominate other people?[4]   This is the very basic question I want to explore in this book.  A corollary question is: Has this always been the case?  The short answer is: no.  I will explore this in more detail in the next chapter; but for now let’s simply accept this: there was a long period of time when no one dominated anyone else (the Long Paleolithic); but inasmuch as domination and inequality exist today, we can also ask: when did they start and why?  When did political and economic interactions shift from reciprocal/cooperative (as existed in the Paleolithic) to non-reciprocal/competitive and why?

I wrote the word “Long” before Paleolithic above to emphasize that for most of human existence, beginning approximately two and half million years ago (B.P.) until the beginning of the Neolithic Era[5] about 12 thousand B.P., humans lived in a world without institutions of political control.  These institutions only began to be created by aggrandizing men (perhaps) toward the end of the Paleolithic in a few hunter-gatherer-fisher societies[6]  (see Case 4.10) and really became a worldwide phenomenon in the Neolithic Era (began ca. 12 thousand B.P.).

Let me say something about the title, The Creation of Domination.  In an earlier form, I called it: The Fabrication of Domination.  I could have written it Scripting Domination, or in a Foucauldian sense, Discoursing Domination.  I chose Creation because it is broader than scripting, which has a mental connection with writing.[7]  Foucault’s term discourse is closer to what I am trying to convey, inasmuch as humans have been creating “truth scenarios” since the beginning of conscious thought.  A scenario is a “setting” or a “picture” of how things are or how they should be.  I am interested in those “truth scenarios” that aspiring men used throughout history to control the minds of others in order to access prestige, power and property. 

Manufacturing a “truth scenario” is not the domination of the bully, with big muscles or powerful weaponry (though we will see plenty of that in our historical tour); but rather it is the domination of the “smart bully,” the one who comes to understand human nature, societal rules and uses them to control the thought processes of those he wants to follow him.  This bully is a creative oppressor.  He fabricates domination by creating ideological concepts, rules and offices, which are his shield behind which he (and those close to him) can operate to his (and their) advantage.

In much of this present work I am going to focus on prehistory and ancient history.  I am also going to try to enlighten the reader by showing how these epochs are related to what is going on in our world today.  Inequality is a part of the last 12 thousand years of human history and we still live in a world where the rich and powerful – people, classes and nations – dominate those who are less wealthy and powerful.  But human life has not always been stratified, as I will explain.


[1] The surplus produced in some late Paleolithic societies and more commonly

after the domestication of plants and animals (the Agricultural Revolution) was comprised of food that could be stored and was subject to theft and invited raids on the stores.  Hence I call it a storable-stealable-surplus.  It was a major stimulus to the development of political organization, first in corporate kin groups and subsequently in chiefdoms.

[2]  The highlighted boxes represent industrial diamonds.

[3] There were Paleolithic peoples that developed political structures

and where politicos governed the distribution of material goods. 

I will deal with these unique cases below for instance see: Case1.5.  Pacific Northwest Coast Storagers.

[4] Generally, it is men who have dominated.  For a detailed analysis of the gender

issue see:  Lerner, Gerda.  1986.  The creation of patriarchy.  Oxford: Oxford University Press.  Unlike some feminists, I see the division of labor as based on the biological differences between the sexes, which formed a bedrock upon which men fabricated patriarchal rules and institutions that allowed them to dominate women.  The first bricks of that foundation were laid early in the Paleolithic with men hunting and protecting; and women gathering and giving birth and nurturing their offspring.

[5] The Neolithic is not so much a fixed chronological period; but rather a suite

of behavioral and cultural characteristics that revolved around a move away from hunting and gathering to the domestication of plants and animals.  However, we can say that it began roughly 12 thousand B.P..

[6] We are unsure when the first complex, sedentary hunter-gatherers came into existence.

It may have been near the end of the Paleolithic or in the Neolithic; but for our purposes

in this work it is not important “when” they came to be; but rather “why” they developed

complex political institutions.

[7] See my book: The Scripting of Domination in Medieval Catalonia: An                                                           Anthropological View.  2008, Carolina Academic Press.

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