Wednesday, 26 August 2009


Here's why economics matters. To me at least, it's not so much the pursuit of a perfect system in which the world can run its resources, because I doubt that there can ever be such a thing, but it's the fact that economics shapes reality because it concerns every layperson. It's the reality of who's getting what part of the pie and how is that part of the pie attained. Am I going to work for it? Am I going to receive it through welfare? Is it going to be taken from me? These questions are going to be answered by the form of politics that my country employs.

Economics, and what kind of economy a tribe, a kingdom or a state is going to have, is the driving force and the legitimacy behind power and politics. Politics is power, because it refers to governance and the legal use of force, and power can only be gained when one controls resources.

The history of man is peppered with battles that have been waged for the attainment of resources. Modern history has seen us shift the basis of power from a physical one to one of economic ideology. The fight between the Democrats and Republicans is essentially due to the difference in economic management - more socialist (and left-wing) or more conservative (and right wing)? The cold war was a battle between capitalism and communism. Americans are dissatisfied with Obama because of the inadequate validity of his economic agenda which have turned out to be rather expensive, ineffective and socialist, which is disappointing in today's world where we are still trying to move on from the Keynesian era of full employment as the goal. Politicians are battling it out every election day to promise better economic packages because this is what matters to the people most - how much less will you be taxed?

Politics exists because power drives the world. Power is about the ability to gain control over people. The control of people is gained through the manipulation of the economy, because people depend on resources.

That's why economics is important, because if everyone knew to some degree the impact that the economy of our state has on our lives, then we would know how to revolt, how to vote and how to decide what kind of country we want to have and live in. We would know the extent of our rights and how to differentiate between a government that is serving us well and a government that is just pulling political bull. We would know if we would rather live in a competitive society or one that redistributes wealth. We would look at the ideologies expounded by our leaders with more enlightened eyes. We would know where on earth we're going.


amberash said...

"Power is about the ability to gain control over people. The control of people is gained through the manipulation of the economy, because people depend on resources."

I don't dispute the point that power is about the ability to gain control over people. But to say that control of people is gained through manipulation of the economy is quite a contentious point- but luckily, you didn't state that it is the only way to control people.

Firstly, power comes in many forms; soft power and hard power.

Say, you have control over the economy, I have the guns and the nuclear weapons- who survives? who wins?

What about the power to set norms and influence minds? Control over minds and the power of standard setting? Ain't it a powerful tool? Perhaps more powerful than control of the economy? Cos then it manipulates people, to do things, willingly.

Jose said...

Heya, thanks for your comment!

Here's my chronological map of the whole dynamic:

a society of people without a leader -> leader/chief/king/government establishes itself -> manipulation of resources -> establishment of a state

A leader doesn't just happen out of nowhere in an originally anarchic society; it attains social validity of its legitimacy as a monopoly of legalized force, often through a painful process.

That in itself is a position of power already.

'But to say that control of people is gained through manipulation of the economy is quite a contentious point.'
- Power is not solely attained through the manipulation of the economy, as you have acutely pointed out. In fact, power is NEEDED before one can control the economy. But to address this point though, I will next bring in another point of yours:

'Say, you have control over the economy, I have the guns and the nuclear weapons- who survives? who wins?'
- I think this is flawed, but anyway. In a state, don't you think it is quite impossible for two entities like you and me to exist? You with the economic resources (and for some reason a lack of guns) and me with the guns (but presumably no economic resources, an implication I am drawing from your comparison)? We have to recall the symbiotic relationship of guns and butter constituting to economics, but I digress.

What really happens is this. If I can get into power (which is, as we agree, gaining control over people), I won't be sitting around doing nothing with the people I have under me. I am going to tax them for the protection I am going to provide. I am going to amass their resources, redistribute these resources, and keep some as a tax. (Division of labour and other stuff occurs but that's another discussion for another day.)

I agree that the power to set norms and influence minds, and control minds and do agenda setting are important tools, but what is the end result once I have done all of these things? I am not going to sit around and not control the economy, which will further allow me to gain the resources I need to strengthen my grip on the people and further my own goals, whatever they are.

amberash said...

Perhaps I have stated this in a more colloquial manner; what I mean essentially is that the economy is an artifically-constructed entity, and it matters only because the people who have created it made it matter to have a sort of power over us. When it comes to immediate survival, in the face of weaponry and military threat, the one with more guns obviously wins. But of course, I'm assuming that the international community, international organisations, alliances and all that do not come into the picture.

Take for instance, the kind of power that North Korea yields today for being a rogue state. Without the alleged nuclear proliferation, do you even think that she would have the power to 'talk' to superpowers in the world? So perhaps, we could think about not alternative sources of power, and challenge the long-established notion that control over the economy gives one the most power.

amberash said...

*wields not yields.

..think about alternative sources of power.

Jose said...

The way you are comparing who has the biggest guns wins indicates that you are looking at power relations between states. If you actually look carefully at my post, I am talking about power within a state; power being the control over people under the government of that state itself.

This is also why I brought up the example of how an economic giant vs military giant situation cannot happen, because within a state, such a scenario can't happen. But I will contend that that does happen between states, as your example on North Korea has correctly highlighted. So we have been looking at the discussion with different basic points.

My response to your first comment might seem a bit convoluted but it is also because you drew in both international relations and within-state governance and I was attempting to address them both. With your emphasis on guns I think you are clearly moving to a more international relations aspect of the discussion, which I do not mind pursuing at all but to which I must clarify that that wasn't the point of my blog post to start off with. I am looking at the state through a realist point of view that power and wealth are symbiotic and therefore it is important to know how citizens of a state are affected, while you are drawing in North Korea to highlight the dynamic and multiple levels of power between states.

Perhaps you were led on to that side of the argument also because I raised the cold war as a point, and also because I said power drives the world, both being global, between-state issues. The focus of my post is still within-state, but with a view that this may be further extrapolated internationally with the cold war as an example.