Critique of Politics #3: Political-Economy and the Relationship of Power and Money

Critique of Politics #3: Political-Economy and the Relationship of Power and Money

By Tim Krenz

October 5, 2018

For: Hometown Gazette

We cannot separate the relationship of politics and economics any more than we can separate a head from a body and still have a whole living person as a remainder. Politics and economics exist in a fusion of interests and control, in a mutually integrated system of influence and resources. Actions in one part will react in the other, and in a system of gain and loss, the impact works to increase the control of wealth and the uses of that wealth for the desired end. Politics controls and economics responds. One or the other seeks to increase its power to control or exercise the other.

In a simple model of understanding: Politics determines the answer to “who gets what and why do they get it?” Economics answers the question of “when, where and how do they get it.” The variable of reference to “they” becomes all important and critical to the success and endurance of power and the resources behind it. This model, and the nature of a political-economy in both pure or base forms, transcends any sense of partisanship. No party acts any differently when in power.

Academics insist that both politics and economics operate within a domain of social sciences, sciences subject to research and statistics, abstract theories and models of decision-making, and even to the study of preferences and replacement variables. Politics and economics work partly this way, according what the idea presented in this paper. But in many ways, taken as a whole in the union of a political-economy, politics and decision-making have more of a social scientific bent of psychology, and the motivations behind fear and greed, which fear and greed often make up the significant factors in any type of conflict of interest.

Leaders, like average people, fear for losing what they have or want opportunities for more of it. They often enter into competition for the very greed of wanting more or something that belongs to others. In politics, psychologies respond to many situations, and can act in realistic and even rational ways in the sense of protection, but they still base decisions on the fear of losing or the greed more more (in whatever terms sought, like security, life, liberty or property). Yet, political leaders will succeed or fail in their efforts to direct others toward personal or common goals based on a type of genius, like those of great artists, who can give others the interpretations they want to represent. In political leadership, artistry and originality can make differences. Simply, politics depends mostly on what people want to believe as their own interest in an act of decision-making. Deciding who gets what and why results as the payoff for support, or as its punishment for opposition (in “Who gets less,” etc.).

Economics has less the nature of social science, where numbers would matter on the perception of decision-making, and it acts more like the science of physics. Starting with the premise of economics delivering the benefits or detriments of “when, where and why,” wealth—ultimately defined as the sum of resources in its many forms—follows a path of gravity towards the least resistance to politically-directed programs. Like light in space or water downhill, capital—the liquid form of wealth—will flow to an eventual stable dynamic or state of productivity and consumption. Furthermore, like the hard science of physics, engineering can manipulate the flow and direction of wealth/energy (i.e. resources) to its desired direction and end uses. Finally, like all physical energy, wealth never gets created nor destroyed: it merely changes form into something else or into other hands of ownership. Economics mostly works these ways, invariably, and almost predictably.

Government as the political form of decision-making over the structure, or the engineering, of its economy determines how the resources get used. The exception to these loose rules of political-economy usually come into play where economics has its own uncertainty principle, or the uncertainty of the value or ownership of a particular resource. Where in doubt, governments as political agents will decide to make the value or ownership of a resource some one's or some entity's property. They can do so arbitrarily, but will do so to benefit the prevailing framework of “who gets what and why?”

On other levels, too, the symbiotic connection of political power and economic wealth reinforce each other. Political power controls the economy; economics will often dictate political power. Political decision-making will direct wealth to desired outputs—where the wealth (i.e. resources) will most benefit the political agenda. Whether wealth benefits a narrow or broad interest almost seems immaterial at this point. It does not involve parties but only interests. Wealth can go to taxpayers in structured ways. It can go to areas of the population or to business interests in the forms of subsidies. It can go into broad areas of investment for reasons only directly related to political choices—to national defense, industrial production, roads, education, public services, etc. The politics determine the uses of wealth, and does so for political reasons.

At the base, the type of government matters on how resources get used. The philosophy, theory, and practice of political leaders serve the ends of their legitimacy and to help the system maintain its power over the ruled. And either the willing acceptance or brutal repression of subjects to the sovereign law allow political leaders its dominion and control of the resources, that wealth that provides the security, comfort, the consumption or the want of goods and services.

As mentioned, the psychological factor of politics, the very genius and artistry of leaders to remain ahead of their competitors and remain in power, ultimately depend on the use of economic resources in a way that complements their power. No rational system of politics can work against its own interest and remain in power. Living conditions and the demand for shares of the national wealth help balance the system between the needs and wants of competitive interest, keeping everyone with a willing interest to continue to live under the conditions which prevail.

Governments, sovereign political entities within their domain of territory and that subject to its will, have remained throughout history the kings of their lands and the resources which stem from it—from the land itself, from the creative impulse of its citizens, from its capital gains, or from the labor of physical force. Politics will continue to decide on the broad features of how it accumulates and distributes wealth. It will always do so, as long as politics has the force to back up its claim to legitimate power, whether through ballots or bayonets. Until political power becomes less an imposition in the free lives of property owning people of a land and time, economics will continue to serve as means for some group to control others. Thus, it behooves citizens to keep their knowledge increasing, to build private property, and to limit the reach of government that does not serve their interest.