Economics is Politics and Politics is Economics (Final Part)


Political economists who attempt to understand national macroeconomic policy often study the influence of political institutions (for example, the legislature, executive, and judiciary) and the implementation of public policy by bureaucratic agencies. The influence of political and societal actors (interest groups, political parties, churches, elections and media) and ideologies (democracy, fascism or communism) is also measured. The comparative analysis also takes into account the extent to which international political and economic conditions are increasingly blurring the line between domestic and foreign policies in different countries.

For example, in many countries, trade policy no longer reflects strictly national objectives but also takes into account the trade policies of other governments and the guidelines of international financial institutions. Ultimately, comparative analysts may wonder why countries in certain regions of the world play a particularly important role in the international economy. They also examine why ‘corporatist’ partnerships between state, industry and labor have formed in some states and not in others, why there are major differences in labor and management relations across countries more industrialized, what kinds of different political and economic structures countries employ to help their societies adjust to the effects of integration and globalization, and what kinds of institutions in developing countries advance or retard the process of development. Comparative political economists have also studied why some developing countries in Southeast Asia have been relatively successful in generating economic growth while most African countries have not.

International political economy studies issues that arise from or are affected by the interaction of international politics, international economics, and different social systems (e.g., capitalism and socialism) and social groups (e.g., farmers at the local level, different ethnic groups in a country, immigrants in a region like the European Union, and the poor who exist transnationally in all countries). It explores a set of related (“problematic”) issues that arise from issues such as international trade, international finance, relations between rich and poor countries, the role of multinational corporations, and issues of hegemony (dominance, physical or cultural, of a country on part or all of the world), as well as the consequences of economic globalization.

Every government faces tough decisions about the appropriate measures: what restrictions to impose and when to relax them, where the money will be spent and how it will be collected, and what national concerns can be limited to foster international cooperation.

These decisions must take into account public health recommendations, economic considerations and political constraints. Just as the policy response to the 2007-08 financial crisis varied from country to country depending on local political economy conditions, national policy responses to the COVID-19 pandemic vary for health reasons. , economic and political.

Some of the characteristics or themes of a political economy include the distribution of wealth, how goods and services are produced, who owns property and other resources, who benefits from production, supply and demand, and how public policy and government interaction impact society.

The problem is that “economy” means nothing to normal people. Revisions to GDP growth forecasts leave them cold. Economic models can show that, net and over time, immigration, competition and free trade are good. But “on the net” isn’t much comfort to the person on the wrong side of that equation, whether it’s an air-conditioning factory worker moving jobs to Mexico, or a Unskilled Londoner seeing Eastern Europeans taking up service sector jobs across their city. “Over time” also isn’t very appealing to people who haven’t seen a major increase in their standard of living in a decade. These people don’t want net benefits for the whole economy in the future: they want more money, for themselves, now. But now economics is once again deeply political, and vice versa. But politicians’ skills in the area of ​​economic persuasion have eroded in recent decades. Most were drawn to politics by social rather than economic issues.

Meanwhile, economics has become a more technical and technocratic field. Great energy and oratory skill was devoted to issues of racial justice, same-sex marriage, gender equality, and more.

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