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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


  1. Bobby MenonnBobby Menonn

    There’s not a vivid example of separating economics and politics either in recent memory or in history. When I say that I mean a classical example of separating the two in an exemplary manner does not exist. As a matter of fact, the co-existence and inter-linking of the two is what makes Nations powerful. Therefore, taking that point further and logically – power is what both economics and politics are about. A country flaunts its economic value through the wealth that is on display either through its citizens or through its political arms – the armed forces, the political environment. It is what causes anxiety for some, and for others it is what exemplifies the power statement. A nations wealth and its politics need to be balanced. Without a doubt the recent upheavals in North Africa and the Middle East is a perfect example of the imbalance. Libya, where I had the pleasure of working, is a beautiful country. There are places in that country where some of the richest travelers and holidaymakers (read tourists) would love to holiday. But no – Libya is closed for tourists, thank you very much. Once again – an imbalance. The country is 679,362 sq mi (1759540 sq km)and larger than USA’s largest state Alaska which is 591,004 sq mi (1,530,699 sq km)yet there cannot be anything more diverse. Its six million population is not exactly a unified nation because there are terrible imbalances between their tribes. The disconnect between the economic power of its oil wealth and its politics is the bane of that country. In cities which are in Sahara heartland the poverty is visible, yet Gadaffi’s son thought it of no issue when he paid Mariah Carey a million dollars to sing a few songs at a New Year bash, or for that matter when another son acquired an expensive stake in European football club, Juventus. Once again an imbalance. Then again the balance cannot be a carte blanche one rule fits all countries. Because our cultures are diverse and our politics are different. No matter where we live Politics will control Economics and where we experience a freedom that makes our lives worthy of living is where the balance is best arrived at between these two pivotal points of our lives.

  2. NY Deal MakerNY Deal Maker

    “Give me control of a nations money and I care not who makes the laws.” Mayer Amschel Rothschild Best describes my opinion on your topic….

  3. Makram MaouadMakram Maouad

    At some point I thought that this would be possible, that is separating the two. But with the recent bailout, it made me realize how improbable this is. Economic policies involve decision taking and decisions are always taken by those who makes us think we are in control of our own destiny. Even BOA CEO Lewis, powerful enough to take matters in his own hands had to face the pressure at some point and accept the decision made for him to buy Merrill Lynch. The idea of absolute free market does not exist, and whenever the economy fails to deliver, politics does. However it can also be vice versa. Politics and economy do not contain each other but rather they complement one another as such that the body cannot live without a soul as it will be useless and a soul needs a body to take its form. This reminds me of the movie 27 grams, a soul’s weight. The only difference in this metaphore is that, in my opinion, politics weighs much more.

  4. Leo MattheosLeo Mattheos

    The question is if we want to separate the politics from the economics or if we want to draw a line between the economics and politics.I think the second is sometrhing we may afford to adopt now as change . Yes all over the years there is relationship with economics and politics and politics affect economics and economics affect politics.I think the one think we can change is that how politics affect the economics.That is more important. If due to the bad economics the government change and another political party come to power that is not so important to majority of people but if the politics and we mean a serious of political decisions affect the economics many people may suffer. In that respect we should move away as much as possible the authority from politicians to regulate and change policies quite often . This work of regulations and policies should be sole responsibility of a body of regulators and acedemics continuously study and research methods to improve economics and the politicians only supervise and suggest than actually decide and intervene on regular basis .In other words the politicians should work towards policies and strategies affect an economy long term .The politicians should not deal with decisions and regulations affect and fluctuate the economic climate on weekly or mothly basis as such intervention create delays,confusion and more uncertainty and finally damage to the economiies.Conclusively the way politics affect the economics and visa versa should be defined under new laws and the politics should minimize their effect on the economics.

  5. Brenda HollenbeckBrenda Hollenbeck

    I think the term economic policy, sums it up. These policies, Economic or political policy, on a global scale have always been tied together, period. Hand and glove concept people. Think of quantum physics and how the energetics apply, physics in the economy, always always, find balance, just as our dear Ziad, has pointed out. Some win some loose. Tis the way of the world. Brenda Hollenbeck, President/Ceo PR Now News/Facebook 310 456 4769

  6. Dave KingDave King

    I don’t think we will ever be able to separate economics and politics. That should not be taken to mean that doing the right thing politically will never happen because some interest group will be inconvenienced. These are times when we should all be thinking about the sacrifices we can make for the good of our grandchildren.

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