Economics and Politics are undeniably intertwined. This is true because of the following reasons:
- Economics play and depends greatly on Government policy. Economics is largely affected by the Government’s approach and policies. A good example of this the policy on Lassez-faire.
- Economic theory and politics influence each other. Forms of government such as Socialism, Communism or Dictatorship has a say on how the economy should ran. Or economically powerful people can also influence and impact the economy by funding. The economy is also being influenced with the politics of the day.
- All economic theories contain political value judgements. Economists have different theories on how the economic evolves how market competition works. These differences mainly come from different political judgments. A best example of this is the Pareto Criterion. It is defined when the re-allocation of resources cannot improve conditions for a person or a group without worsening conditions for others.
- Power relationships affect the economy.
- Structural Power. This power is coming from the imbalances in income and wealth
- The Power to Dictate within organizations.
- The power to make people think. Politics can dictate people on what you want them to think.