“Good Economics is good politics.” —Paul Keating
“The close relationship between politics and economics is neither neutral nor coincidental. Large governments evolve through history in order to protect large accumulations of wealth and property.”
The above quote clearly states that politics is the child of economics. It is because of economics that politics came into existence. Greeks are largely remembered for their contribution to western philosophy and science. The Greek land is said to be the motherland of both politics and economics. Aristotle, revered as the ‘Father of Politics’, is also the birthgiver of economics. Later Adam Smith, the ‘Father of Economics’, put forth his views on economics in the book, ‘Wealth of Nations’, Aristotle had already termed economics as the ‘Science of Household Management’. Since the inception of both these subjects, human mind has greatly advanced towards development and progress. The interplay of both these concepts has helped the wealthy nations become wealthier and also protected the developing ones from becoming more progressed. This is because a country knowing how to manage the dual deal of politics and economics is also way better than any other country in striking a balance between the two, further playing an instrumental role on the world stage. Though both the concepts—politics and economics—have significant role to play in man’s life yet somehow, politics has triumphed over economics.
Politics or Economics
Politics has now-a-days become a topic of interest, gossip and discussion of every single person on the earth. It is not at all a hidden fact that even a person living in the remotest of villages has access to television; and television in turn, is the boiling point of political discussion. Since time immemorial, man has been inquisitive about the working of different associations and above all, the association of government. And where there is government, there has to be politics. The view of politics changed dramatically in the 20th century. Where earlier politics talked about only government, in 20th century, the view put forward by Harold lasswell said,
“Politics is who gets what, when and how.”
Similar is the basis of economics which talks about the authoritative allocation of resources. This, in a way, means—who gets what, when and how, which further supports the fact that economics is the birthgiver of politics. It is only because of economics that we are able to apply political principles in the right way. Be it Trump’s election to the White House or Britain’s May’s too famous ‘Brexit’, both these developments in the world had garnered huge viewer tallies. An astonishing disclosure that sits beneath these two very ordinary looking ‘political’ advancements is that both these occurrences are more of economics than politics. It is a well known fact that Donald Trump, (President of the United States) has won on the condition of giving more jobs to Americans than to anyone else. The above agenda was the main point in the Republican (Trump’s party) manifesto. On the other hand, Brexit which seems to be a political and diplomatic move of Britain, in order to form more cooperative relationship with the rest of the world; is more of an economic move. To set Britain free from the monetary and fiscal obligations of the European Union (EU), which has nurtured from the European Coal and Steel Community (ECSC) which was formed after the huge destruction of World War II; Theresa May invoked Article 50 of the Treaty of European Union. The UK is thus on course to leave the EU on March 24, 2019. Here, we can clearly notice that simple political activities are some way or the other, a tip of huge iceberg i.e., economics.
Importance of Economics
Most of the people know the importance of politics in our daily lives. Politics is important to run a government, steer the growth of the country and protect both, the internal and external sovereignty of a country. But a few would know the importance of economics. Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people. Until and unless, the people in power know how to allocate the resources, the resources would end up getting concentrated in a single group and politics, then, would be of no means. Indeed, economics is an important subject because of the fact of scarcity and the desire of efficiency. To understand economics is to understand politics and human behaviour. Lionel Charles Robbins, a very famous British economist and a prominent member of the economics department at the London School of Economics, has defined economics as—“Economics is the science which studies human behaviour as a relationship between given ends and scarce means which have alternative uses.”
Studying Robbins’s definition makes it all the more important for the world to turn its steps towards economics in order to excel in politics. India has already advanced towards ‘Economics for Politics’ goal. The Prime Minister (incumbent) of India, Shri Narendra Modi, has helped the nation in taking huge leaps in the economic world; and because of that India has garnered immense respect and support. The economic policies of India are being followed by one and all in the whole wide world. Be it demonetisation or introduction of GST (Goods and Services Tax), ‘Make in India’, ‘Skill India’, ‘Digital India’ et. al, all the economic steps have helped the Central Government in gaining the trust of millions of Indians. The government now has a backing of 1210 million people in any of its positive economic initia-tives.
Economics in Today’s World
World economies are in a very bad condition today. The world economy, for a long time now, has been facing a bout of severe financial market volatility. Never ending worries about Europe, with a British-exit (Brexit) from the EU (European Union) is likely to leave the continent in a deep sea trouble. The continuous fears of escalating Saudi-Iranian conflict and signs, most notably of decreasing oil and commodity prices are more or less consistently pointing towards a more deplorable global economy. Coming across all these instances one would definitely ask a question—‘Why aren’t world’s biggest economies able to solve the problems ?’ Is it because of their lesser knowledge regarding the subject or; Is it because of some political reasons ? The latter argument fits far better in this situation than the former. The countries being talked about here have become so busy in playing the ‘dirty game’ of politics, as it is famously called, that they have failed to address these big economic dangers. There’s Saudi-Iranian conflict because both these countries accuse each other of each and everything in political meetings and on political forums. Both these nations are not on a good political footing. This is only one such example where countries have witnessed their share of ‘economic doomsday’ by ignoring economics and flying high on politics. Yet, major world states are not able to bring their focus back to the most important subject of economics. But, one thing which is quite appreciable is that all the nations are slowly but steadily moving towards making the world a more safer economic zone which has further led to the forma-tion of Regional Economic Blocs. These are a huge success in today’s world where diplomatic relationships are marred by not-so-good political practices. EU, NAFTA, SAFTA, ASEAN, African Cooperation are just some of the examples. Though late, yet the world nations are recognising the importance of economics.
One might wonder how India has remained untouched by the economic upheaval going on in the world arena. There are many factors contibuting to the cause. The country’s macro-economy is stable which is because of government’s commitment to fiscal consolidation and low inflation. Investment in public infrastructure and liberalised FDI (Foreign Direct Investment) across the borders has presented India in an optimistic frame amidst the gloomy landscape of unusual volatility in the international economic environment. GDP has been growing constantly and inflation has been kept below the bar of 6%. For this, huge credit should rightfully go to the Finance Ministry and with that to the Finance and Corporate Affairs Minister, Shri Arun Jaitley, who also won the Best Finance Minister of Asia Award by Emerging Markets in the year 2015.
Though the growth of economics as a subject was not at all as progressive as was that of politics, yet economics as a subject and practice to maintain long lasting diplomatic relationships with different countries, has now secured the highest spot in the world politics. The success of Regional Economic Blocs and the stability of Indian economy amidst world chaos has strengthened the position of economics against politics. It is high time that world leaders joined hands and worked towards economic growth of their respective countries and also the world, to make it a single cooperative economic bloc. In the words of Park Geun Hye,
“In human life, economics precedes politics and culture.”
There’s a need to cultivate economics on the strong fundamental basis of our culture and politics, probably from where it came.
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