That is interesting Rahul. I have been thinking about financial markets and labor markets a bit lately from the perspective that each may in essence represent an equal exchange of goods or service. Although the participants may not enjoy equality of exchange there is, in aggregate, that equality nonetheless. Where then, in these types of exchange, is surplus to be derived for those that would exploit the system? I think then about currency markets. In these the exchange is unmistakably one for one value wise. The profit to be made from this exchange is temporally specific. The perception of value of those who habitually utilize one currency remains relatively consistent within a limited time frame. rates of inflation or glut are not immediately available to the average spender until their gas bill goes up or some similar event. there is then the possibility of exploiting that temporal value differential. It occurs to me then, that deriving profit from the labor and financial markets may have a similar aspect.
Politics and economics go hand in hand. From politics point of view economics are tools, for economic point of view politics are tools. So "the most important" is a matter of point of view. For capital owners politics are means to gain more capital, for politicians, capitals are means to gain more power.
As sciences, both political sciences and economic sciences are social sciences, and they should have more or less the same end-goal, to provide society with a framework for efficient development.
Agree...none of them can work without each other...in this world now both are required to be present for highest gains...rich are becoming rich and poor are becoming poor..relatively those in politics are the rich...highly because the power that they attain...
Dear mr. Reshmi Kumari
It's not that simple. Rich can become richer, but making the rest poor is not good for three reasons:
1. You need consumption to sell things, and poor people do not buy to consume
2. You need skilled workforce to obtain high productivity, and poor people have little chance to get educated or stay healthy and work.
3. Social order is endangered because of poverty. Poor and discontent people make good recruiting grounds for extremists.
So without some level of income is assured to most active population, economic growth is capped and social order is endangered, both factors being highly dangerous for rich people and politicians.
I think Economics and Politics as an evolution stage of the same phenomena: human relationships. And when I talk about evolution is impossible to think current characteristics singly. One is mutually result of other.
I appreciate your contribution to my query. Thanks Bradut, Thanks Reshmi and thanks Filipe...
The latter because without Economics you will be unable to do politics
both are interrelated. Nevertheless there are purely economic and politics theoretical problems.
Economics is a more rationnal sciencewith a main goal to satisfy people unlimited needs by fighting against scarcity , hence improving all the creatures' well being. Economics facts can be prouved . There is no rationnality is politics, everything is matter of becoming more welknown and more powerful. There had never been a common agreement on political government or leading that is why we have a less balanced global economy.
i would rather choose an optimal approach to the question that both economics and politics are really important as economics deals with human's wants to be satisfied where as politics has to do with conflicts among individuals or groups. but to consider the nature of question i would like to comment that economics is relatively more important as there is no concept of life without the satisfaction of wants specially the basics ones but we can live even if there are conflicts in the society.
i would like put in the words of mrs gandhi (then prime minister of India) that a good economics is the good politics but it need to give benefits to the society. so economics is always first without politics later politics follow the economics
Both are important. Economics can't be implement without politics.
The word politics derives from the Greek polis. According to Hannah Arendt the polis is an artificial arena within which we suspend the truth in order to offer specific freedoms and equalities where these may not have existed before. This is from the first couple chapters of her "On Revolution". Economics, then proceeds from this arena and at the same time precedes it. There are two very different economic models at play in the world today. One in which raw power is used for the betterment of its possessor, as in the Iraq invasion, and one in which the machinery of economic processes are used by those with knowledge of their inner workings. Other than this Economics is a social science that exerts a surprising influence in a context where its best comparison is with predicting the weather. Politics, on the other hand, is the contextualizing of or attempts to wrest an act of will from the polis.
There is no economic reality without politics. Law making is essentially politics, and there is no property, no contract, no tribute, no regime of work outside Law, and there is no market without the notions of property, contracts, tributes and work. Economics, as a social science, cannot ignore politics, but is mustn't be conditionned by political objectives for it would lose its character as a science.
I've read the previous comments and I appreciate them ... each one has at least one valuable perspective ...
What I want to add is a keyword which I consider to be a common ground for Politics and Economics: "ambiguity".
Usually Economics doesn't prove ... but tries to persuade, to convince people about some ambiguous statements. The trouble is that the more ambiguous is, the more close to Politics is, while further away from Science.
Politics cultivates ambiguity (and I mean good quality Politics, when it's not plain simple lying) and embed it in law and policy. Politics is not strong enough to have its own ambiguities, so it encourages other domains to promote ambiguities and for this Politics offers incentives ... perhaps in little chunks of power ... And some domains are responding more satisfactory ... Economics is among them.
Please observe and (don't) appreciate the ambiguities within my comment ... :D
PS: And to answer the question: Economics and Politics should be independent, or at least their dependencies/connections should be made as explicit as possible. I use "independence" as in "lack of influence".
Knowledge made available by one domain might be used by another domain without spoiling this "separation".
Politics eventually led me to study economics. It became clear to me that politics was about power - who had it, who distributed it, who got it, how, why, when, where and who. But at the bottom, power was money - who had it, who distributed it, who got it, how, why, when, where and who. Realistically, they cannot be independent. And then ask yourself about the transferrece of wealth to the government throuh taxation and the creation of money out of thin air - quantitative easing to infinity - and find out where that takes you. It's become a lifetime preoccupation.
Let''s consider economics is developed and theorizised due to human needs: me the horse you the rice, let's trade! Because of human's deficits e.g. greediness and at the same time it's altruistics qualities conduction of these are required: politics! Although upright politics considering humans individual needs and fair distribution is rare. So, economics without politics is impossible; though about 'politics without economics' you can not say anything 'cause societal conception are totaly different in this way.
Looking at the concept of economics, it is designed to assist in the development of politics. The betterment of citizens which politicians are after is based on economic theory, therefore one cannot separate each from the other. It is just like the yoke in the egg. One cannot get into the yoke without going through the egg.
@ Adeyemi: How do you consider "economic theory"? And are the policitians 'after the betterment of citizens' or are politicians just doing their job without integrity?
I think "betterment of citizens" is not a question of Economics, but of Ethics, except if we do understand "betterment" as "welfare".
@ Ricardo. True. One could say public and - so it is meant individual welfare is allocated and distributed by politics among others based on ethics? And, economy is trade optimilizing private welfare, not based on ethics. Politics in such matters may be considered as a tool. No part nor 'ruling' concept.
In the U.S. it seems to me that politics trumps economics as can be seen in the Fiscal Cliff deal. The current administration has clear objectives to redistribute income through the tax code and other means. President Obama in his last term created a bipartisan commission to examine deficit reduction options and the result was the Bowles-Simpson report. Among other recommendations, Bowles-Simpson proposed pro-growth tax reform: broaden the base and lower marginal rates. Economics favors this approach since tax rates are distortionary as are tax preferences (such as the mortgage interest deduction). However, the president insisted on higher marginal rates on the top end of the income distribution. Higher rates and a broader base was the president's preferred direction. This was a political choice not an economic one. Perhaps an even more stark example will be the efforts at gun control following the shootings at the school in Newtown. The statistical evidence is clear that the availability of guns in the U.S. contributes massively to gun deaths (the U.K., which is about 1/5th of the U.S. in population terms has as many deaths in one year as the U.S. has in one day). However, the Right to Bear Arms (under the second amendment) is enshrined in politics (even though the Founding Fathers could not have envisaged an AR-15 with a 30 round clip when the amendment was drafted). Serious gun control is needed but the chance of it being passed is very small. Perhaps in the U.S. the only sense in which economics trumps politics is the money flow needed to get elected. However, one should not expect a sane economics-based debate on most policy choices in the U.S.
Economics was once called Political Economy, the two are intertwined. The relative strength of economic classes determines the nature of the state. Politics is nothing else but using state power for the benefit of the ruling class and managing contradictions and conflicts arising thereof.
B. C. Mehta has brought a good remind. When Economics was born, it was called Political Economy, to be distinguished of Domestic Economy. Curiously, the first book with this title, by Montchrestien, was dedicated more to Politics than to Economics. I'd just disagree, I'm afraid, in Politics definition, for using state power means managing contradictions and conflicts, of course, but only by such a managing does a class become ruling.
Economics is a one-dimensional insight into the social mechanism, based on the concept of the Economic (Rational) man, and (in Macro-Economics) thumbrools of economic behaviour, bereft of socio-cultural historical contexts. Hence, for it to be useful in real life situations, politics needs to be factored in, since politics reflects the contexts of which economic analysis is innocent. Thus, economics without politics is toothless.
On the other hand, politics already subsumes economics, and in modern materialist societies economics is the centrepiece of politics. Politics without economics can prosper only in traditional societies where sociological and cultural issues may be more important than economic issues.
Thus, politics without economics is un imaginable in the modern context, while economics without politics is toothless.
If however, one is to be bereaved of the other, I would imagine economics without politics to be more important than politics without economics. This is because, economics without politics has a life of its own, its own paradigms and existence, however partial. On the other hand, politics without economics cannot survive in modern materialist societies.
The regime of contracts and property is always result of a political decision, for the simple fact of touching something does not make of anyone its owner. Therefore, I'm afraid there's no possibility of economics without politics.
Depends...if by economics you mean simply the means of producing and distributing well then economics comes first. Only after material means of subsistance is accomplished can we then deal with how to distribute it (politics). So first comes production (economics) then comes distribution (politics)....at least that's how I see it.
This view is a little simplistic.
The way we choose to produce or distribute things in a market economy also determines how it is distributed. Eg. hitech, capital intensive production will give less to labour and more to capital, and conversely. A large part of the distribution problem is solved coterminously with production.
What politics can affect is mostly distribution outside the market process: through public economics. Only rarely does politics intervene in the market process directly because of inefficiencies of price control. And then, it is mostly to reduce the inefficiencies due to monopolistic practices.
Economics includes public economics. Thus, it does reflect on politics. The problem with economics is that it is mostly based on the idea of behaviour of an economic man, and a few thumbrules of group behaviour. Politics is founded on the realities of social psychology and group behaviour. Because it is innocent of the realities of actual historical social psychology and group behaviour, economics can only inform politics of possibilities but is toothless without, depending upon the latter for concretisation and realisation.
On the other hand, politics has a wide range of issues to tackle other than economics. For instance, law and order, defence, civil rights, etc. Economics is just one aspect. In spite of this it is closely tied to economics in two ways. First, it takes money to do most things. The answer to where is the money is to be found in economics. Second, material well being is increasingly the centre and focus of modern development. FOr this reason, this remains the centrepiece of politics.
you're right Rahul...my answer is simplistic, but then so is the question. When asked which is more important or which comes first though, I still have to come to the conclusion that first there has to be a surplus for that surplus to be divided. So production comes first and then distribution and so economics then politics. It seems we can trace every historical event back to its material roots within economics or material production. I'm so far a firm believer in the theory of historical materialism for many reasons.
"hitech, capital intensive production will give less to labour and more to capital, and conversely" I do not necessarily agree with this claim and it illustrates the importance of the economic analysis side of the question and the political environment in which decisions are made. More capital intensive production raises K/L by definition. Workers dig ditches with diggers rather than shovels. Real wages tend to rise (as they did in the second half of the 1990s in the U.S. as the share of investment in GDP rose). During this period, the share of profits in GDP fell. Over the last three years, this pattern has been reversed. Employment growth has been surprisingly strong given moderate GDP growth but real wages have fallen and the labor share of GDP has declined as the share of profits has risen. In a market economy, Adam Smith's invisible hand has consequences which individual firms did not plan.
On the bigger picture, maybe trying to answer the question of politics over economics is like trying to say which blade of Marshall's scissors is more important? The truth is both matter and, as economists, we can only hope to influence the debate in a rational direction. My optimism that we can do so, as I noted in my earlier post, is not great.
Both Weese and Ryding have important points.
I regret for sounding unduly patronising with with the word 'simplistic'. But I have this objection to the surplus distribution theory. As I said, politics deals mostly with redistribution and rarely intervenes into the distributive process free markets. More importantly, the redistribution relies on taxation, and indirect taxes take from the rich and poor alike. Even direct taxes have an incidence on 'wages'. Where does this leave the idea that politics redistributes surplus.
As regards, Ryding, I stand corrected. My own view was simplistic. The nineties also witnessed some fall in interest rates and growth of per capita incomes. If interest rates fall, then profit shares rise only if the growth in capital intensities exceeds the sum proportionate fall in interest rates and growth of per capita incomes. This may not have happened in the later half of 1990s.
Also, I would urge that many puzzles at the aggregate level may be illusory products of aggregation and disappear with disaggregation. Since the mid eighties, US economy underwent a drastic structural change in favour of newer labour intensive sectors, and away from traditional capital intensive sectors. How far has this structural change been a source of aggregate trends?
Ryding's use of Marshallian scissors analogy on question is apt.
That is interesting Rahul. I have been thinking about financial markets and labor markets a bit lately from the perspective that each may in essence represent an equal exchange of goods or service. Although the participants may not enjoy equality of exchange there is, in aggregate, that equality nonetheless. Where then, in these types of exchange, is surplus to be derived for those that would exploit the system? I think then about currency markets. In these the exchange is unmistakably one for one value wise. The profit to be made from this exchange is temporally specific. The perception of value of those who habitually utilize one currency remains relatively consistent within a limited time frame. rates of inflation or glut are not immediately available to the average spender until their gas bill goes up or some similar event. there is then the possibility of exploiting that temporal value differential. It occurs to me then, that deriving profit from the labor and financial markets may have a similar aspect.
Economics and politics are meant for each; otherwise, either solely on their own is just a vain pursuit. Devoid of contribution to the society at large. Economics devolves into an intellectual pursuit, politics becomes an exercise in hegemony. Economics must be a science and a philosophy for action (moral philosophy). Can't say much on politics since I am not trained in political science. There may be a strong argument and basis for the intermarriage between economics and politics, personified in Plato's Philosopher Kings. More recent incarnations of them can be found in the captains of industry and some of the illustrious robber barons of the past. Where after a lifetime of capitalistic pursuits and lobbying in politics some have settled down to a quiet existence as philosophers and philanthropists. These have opted for a sequential switch of roles between economics and politics and not a coexistence between the two.
Let us consider a concrete case in social sciences. We have a discipline (or half discipline) called International Political Economy. By the name itself, it seems like a variant of economics. In reality, it is now a part of international relations (as social science) and thus a part of political science. However, this does not imply that politics (or more precisely political science) is more important than economics. As I have argued in the two different question pages below, International Political Economy needs a real economics, but at present the economics (I mean mainstream neoclassical economics) cannot deal trade conflicts.
- Can International Political Economy (IPE) be considered as a field of International Relations (IR) or an autonomous discipline of the social sciences?
https://www.researchgate.net/post/Can_International_Political_Economy_IPE_be_considered_as_a_field_of_International_Relations_IR_or_an_autonomous_discipline_of_the_social_sciences?_tpcectx=topic_detail&_trid=MA0eCzf8Crd6hB2IkJH61iNk_7
- Is conflict in international trade an illusion?
https://www.researchgate.net/post/Is_conflict_in_international_trade_an_illusion
To be more precise, neoclassical trade theory such as Hechscher-Ohlin-Samuelon theory or its variants can treat the change of factor prices (wage and profit rates). Thus, it can treat problems like workers profit by the rise of wage rate and capital owners loose by the decline of profit rate. However, the real conflicts are much different from these problems.
For example, between the United States and Japan, there were three waves of trade conflicts. (1) Textile products conflicts in 1960's. (2) Steel products in 1970's. (3) Home electric appliances and automobiles in 1980s. In all three cases, it was the American people in afflicted industries who protested to the influx of Japanese products. They claimed that their employment and enterprises are lost because of cheap imports. Evidently these conflicts are not question of factor prices. The real problem was the loss of employment and industrial declines.
Neoclassical trade economists denied the existence of trade conflicts, because its theory is ill adapted to these questions. In face of this state of economics science, political scientists picked up trade conflicts as their problem. It is a good reaction as a part of social sciences. International Political Economy became a domain of International Relations. As a result of this history, International Political Economy became a part of political science without economics.
Is this a good state for International Political Economy? I do not think so. International Political Economy needs economics, a true economics that can treat at least trade conflicts. As there are varieties of conflicts, I do not say that trade conflicts are the unique economic conflicts.
I believe that the original question is ill posed (opposite of well posed). The case of International Political Economy is only a case. The real question to ask is how to build collaboration of political science and economics. When you cannot find a good partner, you even hope to construct a new theory. In the case of trade theory, such a new theory exists already. For this point please see my recent paper (still in a draft stage) below. I discussed the related point in section 17.
Working Paper The New Theory of International Values: An Overview
Here are some brief comments on previous posts in this question page:
Somiyabalo Batcha's post (#11) contains two phrases:
- Economics is a more rational science.
- There is no rationality in politics, everything is matter of becoming more welknown and more powerful.
Is this comparison valid? Although there are many textbooks in economics that claim something like this, it is rather shallow understanding of economics, because people in economy are not behaving in a "rational" way. Most simple formulation of "rationality" in economics is to maximize an objective function. However, it is not in general possible to maximize in a bit complicated situation.
I have argued long how this misunderstanding disfigures economic science in my paper (still in a draft stage).
https://www.researchgate.net/publication/301766363_Microfoundations_of_Evolutionary_Economics
Anurag Agnihotri (post #12) cited Mrs. Gandhi and claimed "economics is always first without politics later politics follow the economics."
Mrs. Gandhi as politician can make a comment like this. In reality, economics science is influenced much by political thought than majority of economists think it to be objective. Anti-Keynesian revolution is the form of rational expectations was political phenomena for a half of the truth. I admit that there played logic internal to economics, but that (conservative) "revolution" must have difficulty to take place without political circumstances after the Vietnam War.
Peggy Salvatore (post #20)
- Politics eventually led me to study economics. It became clear to me that politics was about power - who had it, who distributed it, who got it, how, why, when, where and who. But at the bottom, power was money - who had it, who distributed it, who got it, how, why, when, where and who.
I stand with Peggy. Symmetrically we may say that economics leads one to politics. If we do not have a good sense of politics, our economics may lead to effects that we have not expected and even wanted to evade.
Rahul Shastri (post #31)
- Economics is a one-dimensional insight into the social mechanism, based on the concept of the Economic (Rational) man, and (in Macro-Economics) thumbrools of economic behaviour, bereft of socio-cultural historical contexts. Hence, for it to be useful in real life situations, politics needs to be factored in, since politics reflects the contexts of which economic analysis is innocent. Thus, economics without politics is toothless.
I agree with Rahul in a deep place. However, the understanding that "economics is one dimensional insight" is too much influenced by the mainstream shallow understanding of the economics facts. Economics based on the concept of Rational Man (or Woman) sees only a small part of our economic life. We need to construct a much deeper economics. This is what I tried to do in my above cited paper.
Working Paper Microfoundations of Evolutionary Economics
Can't separate economics from politics. Politics is Economics, and vice versa.
If we see the first term economics without politics, in my opinion if we use economics principles e.g marketing so we need the clever techniques to sell out product and politics is the clever tech: to run any organization / government, so the first term is right in my opinion.
Economy runs when the interacting parties agree what thy will do without any enforcement from outside. Politics intervenes when there is a conflict between parties.
In an organization and administration, there are always some aspects of conflicts and therefore economics without politics is a wishful abstraction of the reality. For majority of questions you can do with this abstraction, but you will soon or later encounter that you should think of politics.
Dear Lydia Chikumbi ,
the question is not as simple as you sum up. We have now a good example. It is the Modern Money Theory (MMT). As we understand from recent American Congress arguments, an economic theory that asserts government deficit does not imply inflation is now a hottest topic in the policy or law makers. It is evident here that economics and politics are concerned. The trouble with MMT case is that this combination does not harmonize easily.
In my opinion, MMT is right as far as MMT theorists claim. But, this message is easily misunderstood or misused by politicians and politics-motivated economists (those who want to be influential in whatever means). It is easily transformed to a populist claim like "more benefit" when economics advice it is necessary to demand no more burden (e.g. to avoid inflation).
I am afraid that those politics-oriented economists understand the risk and danger of their simplest preaches. Economics and Politics cannot stand alone but often they do not go hand in hand. There might be schisms and conflicts between them.
Economics without politics to me to be more important than plotics without economics. Economics refer to the application of economic concepts and theories formulated on certain accepted principles which do not take politics into consideration. However, politics will make use of these concepts towards its realization of various socio-politicsl goals.
Dear Adeyemi Ewetade and Lydia Chikumbi
Please read my post dated July 12, 2016. I believe it is necessary to argue based on concrete cases.
One approach to this is to considert whether one can exist without the other.
Politics as belief, knowledge, or institutions can exist without any economics (as knowledge or institutions).
Whereas any economic knowledge or institution fully require politics to exist.
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