The word ‘politics’ is derived from a Greek word ‘polis’ meaning state/city and ‘politicos’ meaning affairs of a state. ‘Politics’ in general refers to the concept of acquisition and application of power, where the politicians group together to make decision about administration.’ Economics’ is the term used for studying production, buying, and selling and their relation with law, custom and Government.
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When we penetrate to the roots to understand the origin of these two subjects we come to know that earlier ‘economics’ was a wing of ‘politics’ know as ‘political economy’ during the 18th century and gradually the changing interest and vastness of the study made provision to emerge as a different subject in the 19th century. Similarly ‘politics’ emerged only after the birth of economy. People planned about having a leader or an authority not during the time of barter system but after the coining of the new words like currency, tax, demand, supply, need, etc. occurred. Thus, directly or indirectly, both politics and economics started their journey moving hand in hand from the time of their origin and today have reached a destiny where both are interdependent for mutual profits i.e., if the bellies of corrupt politicians have to be filled with black money, it is possible only by the traders and businessmen. Similarly, if the wallets of their pillars of economics are to be flooded with credit cards and debit cards it can be done easily by these people’s representatives who have the power to issue tenders and make policies.
Due to the extent and significance of these two important forces it is pertinent to ask ‘who rules whom?’ One are the policy researchers who give the forum for the politicians to work and the other are the policy makers who sanction the powers and aid the economists to fulfill their tasks. Thus, both are necessary for each other’s existence. It is proven that both both are equal force and if two equal strengths have to co-exist, then it is the rule of nature that dissatisfaction, play for supremacy, discontent, complaining, difference of opinion, etc., have to exist.
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The following quote of two noted people from the developed nation ‘USA’, the role model for many upcoming economies, as it gives equal important to democracy and capitalism, gives a clear picture of the tug of war between the politicians and economist.
“Government’s view of the economy could be summed up in a few short phrases. If it moves, tax it, if it keeps moving, regulate it. And if it stops moving, subsidies it”. Ronald Reagan 40th President of USA.
“The first lesson of economics is scarcity – there is never enough of anything to satisfy all those who want it. The first lesson of polities is to disregard the first lesson of economics”. Thomas Sowell, an US economist.
Irrespective of whether a country follows a socialist or capitalist type of economy, the legislature mainly concentrates on how to curb the increasing demand, to avoid inflation and to bring down scarcity of commodities. The Indian Government imposes that major share of any enterprise of any sector should be in the hands of public sector and at most 49 percent of shares can be allowed for the private firms to conquer. The Government delayed in talking the decision of allowing the Foreign Direct Investment (FDI) for several decades till 1991. The ‘policy of disinvestment’ in Public Sector companies has made many companies either to lose. Even for ‘foreign investments’ the Government fixes certain percentage for investment depending on the profits earned and implements several other rules and regulations to see that the Government is always on the safer side and devoid of any loss.
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Besides these direct threats, the indirect threats are the Finance Ministry which controls the supply chain and the Reserve Bank of India (RBI) concentrating on the demand chain. During the periods of high inflation, the rich are able to by the commodities where as the poor cannot afford the high prices. Hence, in order to grab the money from the hands of the rich, the RBI restricts the flow of money through public and private banks by regulating the funds or increasing rate of interest on loans. Thus, the Government controls the action of economists which acts like a big barrier for them to earn huge profits.
The distinction between the economic and political activities is fairly easy to discern. For example, making shirts with cotton instead of silk is economics and placing an import duty on cotton to satisfy silk producers is politics. Similarly, exploring Bay of Bengal for petroleum is economics, but exploring Mars with rovers is politics. Economics is hiring the competent and firing the incompetent while politics is promoting an employee with highest seniority.
Let us take the example of mobile phones. While the credit should go to the inventor for making communication easy, it is the economists and the politicians who vie for the credit. The economists used this technology, gathered people, manufactured and released in markets with different features at different prices to suit all class of people and the politicians gave permission for its production. If India today is able to boost that its economic growth is 7.5 percent per annum, it is because of the MNCs and other private sectors that has increased the per-capital income for the country along with the increase of number of employers and minimized the brain drain by offering huge salaries to the highly-skilled.
Economics tries to prepare today to afford tomorrow. Economists concentrate only on profit earning areas like the corporate sector, automobiles, heavy industries, communication, food and health sectors. Another drawback of economics is that it is meant only for skilled labourers who know the money earning tactics and never concentrate on common man in general. Thus, it can account only for economic growth but not economic development. Hence, Government acts as the only barrier by not allowing the economists to loot profits.
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Thus, politics and economists are definitely two twains which never meet because one is bound to think about social welfare and other is meant to think of economic welfare. The first thinks of providing equality of status and opportunity while the latter works to raise the standards of living.
Since both are essential for public progress it is necessary to maintain a balance without allowing the monopoly of any one to exist.
If the economists are allowed to have their say, then we may have to face problems like recession, decrease of production of cereals and pulses, inflation, scarcity, etc.
If the politicians are allowed to do what they like without the interference of the economists, then we may have problems like inefficiency, low rare of growth, etc., because it will be difficult to control the rate of corruption.
Though the two twins never meet in ideologies, they share definite relationship which is sufficient to give up individual supremacy, profit motivation and sincerely work for a common cause of making India a developed nation.