What Is Entangled Political Economy? A Conversation with Mikayla Novak

“Government intervention in the economy” is one of those phrases that sounds natural until we pause over it.

The phrase suggests that government stands outside the economy and then steps in to correct, regulate, subsidize, tax, or prohibit. It gives us a picture of two separate spheres: the economy over here, politics over there, and policy as a bridge between them.

Entangled political economy begins by rejecting that picture.

Politics is not outside the economy. Political actors are not external engineers working on a machine from the outside. They are participants inside the same social order as everyone else. Legislators, regulators, firms, voters, agencies, courts, lobbyists, nonprofits, professional associations, and citizens all act within a shared ecology of rules, incentives, relationships, and expectations.

That matters because the way we picture the relationship between markets and politics shapes the questions we ask.

If we imagine markets and politics as separate spheres, then we tend to ask: When should government intervene? What market failure should it correct? Which rule would improve the outcome?

Entangled political economy asks a different set of questions: How do political and economic actors interact within the same system? How do rules reshape the possibilities people face? How do organizations use political processes to alter the terms of exchange? How do interventions change not only outcomes, but the relationships and incentives that generate future outcomes?

I recently discussed these ideas with Mikayla Novak on the Mercatus Hayek Program Podcast. Our conversation touched on the core intuition behind entangled political economy: politics and markets are not separate worlds. They are overlapping forms of social action, organized through different rules and constraints.

This framework has shaped much of my recent work, including my research on innovation, regulation, health care, and democratic governance. It also informs my book project with Richard Wagner, where we examine how democratic political economy evolves over time as more areas of social and economic life become organized through triadic relationships — relationships in which third parties condition the terms under which others may act.

For me, the value of entangled political economy is that it helps us see what conventional language often hides. “Government intervention” makes political action sound external, technical, and episodic. But in reality, politics is already part of the social order it seeks to govern. Once we see that, we can ask better questions about institutions, responsibility, power, and the conditions under which people are able to live self-directed lives.

Listen to the conversation here: Entangled Political Economy — Marta Podemska-Mikluch on Complex Connections