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Can we separate Economics and Politics?

By : Ziad K. Abdelnour| 21 February 2011
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Some people criticize the injection of politics into economic discussions.

But economic historians tell us that economists used to understand and accept that economics is wholly interrelated with politics, and that politics affects our economy.

They note that modern economists have artificially tried to somehow separate the two, like Descartes tried to separate the mind from the body.

Indeed, the father of modern economics – Adam Smith – talked a lot about politics in relation to economics.

If mainstream (“neoclassical”) economists think that politics is an irrelevant and separate topic, it may be because they are using wholly discredited models or that “it is difficult to get a man to understand something, when his salary depends upon his not understanding it.”

In the real world, political decisions determine who gets bailed out and who doesn’t, who stays afloat and who goes under, who gets rewarded and who gets prosecuted (and if prosecuted, who gets hit hard and who gets off with a slap on the wrist … or a slap on the back). As such, it should be obvious that we cannot discuss our economy or even investing decisions without addressing politics.

Another example of the intersection of politics and the economy is military policy. America’s military policy is directly connected with the economy, and is indirectly connected with our individual investments.

Your feedback as always is greatly appreciated

Thanks much for your consideration

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