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Can economics really be separated from politics? 🤔
I know this isn’t really a purely economic question but I wanted to get an economist perspective. The relationship between economics and politics is a complex and longstanding debate that has been the subject of much discussion and disagreement. While some argue that economics and politics are inherently intertwined, others believe that they can and should be kept separate. So, can economics really be separated from politics? Let’s dive into the intricacies of this debate to find out the answer.
The intertwining of economics and politics
It’s difficult to discuss the relationship between economics and politics without acknowledging the ways in which they are inherently intertwined. Here are a few key points to consider:
1. Economic policy is driven by political decision-making: At its core, economic policy is shaped by the decisions and actions of political leaders and policymakers. This means that political considerations often play a significant role in shaping economic policies and priorities.
2. Political ideology influences economic decisions: Different political ideologies, such as socialism, capitalism, and liberalism, can have a significant impact on economic decision-making. For example, a socialist government may prioritize policies that emphasize income equality and wealth redistribution, while a capitalist government may focus on promoting free market principles and maximizing individual freedom.
3. The impact of political events on the economy: Political events, such as elections, regime changes, and geopolitical conflicts, can have a direct and immediate impact on the economy. For example, uncertainty surrounding political events can lead to market volatility and fluctuations in business investment.
4. The role of government in regulating the economy: Governments play a crucial role in regulating the economy through policies related to taxation, spending, trade, and monetary policy. These policies are shaped by political considerations and have a significant impact on the economic landscape.
While it’s clear that economics and politics are closely intertwined in many ways, it’s also worth exploring whether it’s possible to separate the two in practice.
The case for separating economics and politics
Despite the inherent intertwining of economics and politics, some argue that it is both possible and desirable to separate the two. Here are a few key points to consider in this debate:
1. The importance of independent economic institutions: Many economists advocate for the establishment of independent economic institutions, such as central banks, to ensure that economic decision-making is insulated from political pressure. These institutions are often tasked with conducting monetary policy and promoting economic stability.
2. The dangers of politicizing economic decision-making: When economic decisions are driven primarily by political considerations, there is a risk that short-term political goals may take precedence over long-term economic interests. This can lead to inefficient and unsustainable economic policies.
3. The need for evidence-based economic policy: Separating economics from politics can help promote evidence-based economic policy by allowing decisions to be grounded in economic theory and empirical research rather than political expediency.
4. Strengthening the credibility of economic policy: By separating economics from politics, governments can enhance the credibility of their economic policies and reassure markets and investors that economic decisions are being made in the best interest of the economy as a whole.
It’s clear that the debate over whether economics can be separated from politics is multifaceted and complex. While some argue for the benefits of separating the two, others contend that they are intrinsically linked and cannot be separated in practice. The reality likely lies somewhere in between, with the optimal approach being a careful balancing act.
In conclusion, while economics and politics are undoubtedly intertwined in many ways, it is both possible and desirable to strive for a degree of separation between the two. By establishing independent economic institutions, promoting evidence-based economic policy, and avoiding the politicization of economic decision-making, it is possible to create a framework in which economics can be effectively separated from politics, to the benefit of both fields.
By taking these factors into consideration, it becomes evident that while the relationship between economics and politics is complex and multifaceted, the potential benefits of seeking a degree of separation between the two outweigh the challenges. Ultimately, the key lies in striving for a delicate balance that promotes sound economic policy while acknowledging the political context in which these decisions are made.
The implementation of economic policy cannot be separated from politics, because economic activity is embedded in a social, political, and cultural context.
That said, most academic economists don’t have to worry much about political factors in their day-to-day research.
Depends how specialized you are. If you are a student learning “what is economics?” and thinking about economics as the study of resource allocation in a society, then I believe it is better to think of politics and economics as being intertwined. If we think of politics as how power is allocated and delegated (with the concomitant liberties and restrictions of liberties) then it is an easy argument to make that the political system determines the economic system.
The OG economists like Smith, Ricardo, Marshall, Mill, Marx, etc probably thought of themselves as political philosophers first. Their work is often referred to as “political economy”.
Today we have lots of little corners and specializations for economists so one can easily study many corners without considering politics – simply by assuming that the political system isn’t going to change within the scope of what one is interested in studying.
But there are still those that study and think about these “big picture” notions of how political systems and economic systems work together. There are even those that study “institutional” economics (Acemoglu is someone I like to read thinking about this subject).
Many of today’s economists simply assume that capitalism is the end stage – which is probably true if you are only interested in the next ten or twenty years. We love our ceterus paribus.
Grab yourself a copy of a history of thought book and you’ll see how economics started as the study of these big picture ideas (that you are having) and has now flowered into a whole bunch of different and narrow areas of study.
Entirely? No. Politics encompasses many economic questions.
However, many practical questions need not delve deeply into politics. Supply and demand curves do not care who you vote for.