Hello and greetings to you, dear readers! We are glad that you are with us in this article from Sheikh Ali Mohammadi’s website. In this article, we are going to examine one of the most complex and amazing relationships in the world, namely the relationship between politics and economics. These two areas, which are seemingly unrelated, in fact strongly influence each other and cause the formation of new and often complex patterns in different societies.

In the following, we invite you to read this article carefully to look at this important and fascinating topic with a new perspective.

:Politics and Economics: Concepts and Origins of Words

.Politics and economics; these two terms are often presented as separate parts of the humanities, but in fact, they are practically in constant interaction with each other

Politics comes from the Greek word “Politika”, which means “public affairs” or “civil rites”. Traditionally, politics refers to the management of society, government, laws and decisions made at a macro level for the common good. At a simpler level, politics deals with how power and resources are allocated in society and creates a type of social interaction that can simultaneously create and change laws, rituals and executive programs
Economics comes from the Greek word “Oikonomia”, meaning “household management”. Initially, this word referred more to the management of limited resources and their distribution within the home or family, but today it has become a complex science that examines how limited resources are allocated at the level of society and countries

In fact, both terms originate from ancient Greek concepts, but today they have taken on broader dimensions. In the contemporary world, politics and economics are closely intertwined, so that changes in one can quickly affect the other

:Special and rare views on politics and economics

Now, let’s look at some rare and surprising theories about the relationship between politics and economics that may have been less widely discussed

1. The theory of “Political Economy”:
   In this theory, politics and economics are seen as two parts of a single system. Unlike classical theories that consider politics separate from economics, this view strongly emphasizes the interaction between the state, political institutions, and the economy. In other words, politics comes into being to shape economic policies and economic decisions, and conversely, economic processes also determine the structure and decisions of politics..
2. The theory of “Productive Economy”: 
   This theory states that all economic policies should lead to some form of strengthening of production at the national and global levels. In this view, the role of policies and laws that affect industry, trade and investment is very prominent. In this theory, economic development is more concerned with production and increasing production efficiency than with the consumption and distribution of resources.
3. “Development Economics” Model:
   This model addresses the complex relationships between government policies and economic processes in developing countries and emphasizes that economic growth in these countries is directly influenced by government decisions and policies. Decisions such as resource allocation, trade policies, and industrial orientations effectively influence how infrastructure development and industrial growth occur in these countries.
4. Behavioral Economics:
   In this approach, economic policies and decisions directly affect the behavior of people and societies. In this model, the focus is more on the psychological and social aspects of economic decisions. Economic policies cannot be applied solely in a numerical and analytical way, but must consider how individual and collective human behaviors are affected by economic changes and macro policies.

Why should politics and economics be studied together?

Finally, it must be said that politics and economics are two spheres that always influence each other and never operate independently. Changes in politics can lead to huge changes in economic processes, and vice versa, economic policies may also influence political decisions. For example, changes in tax and trade laws and regulations or monetary policies can affect not only the economic lives of citizens, but also the political structure and public trust in governments.

What do world famous people say about politics and economics?

1. (Adam Smith)

Adam Smith, an 18th-century Scottish economist and founder of modern economics, was one of the first to directly address the relationship between politics and economics and to introduce the concept of the invisible hand. Smith believed that the economy and free markets should naturally regulate themselves, and that the role of the government should be minimized in this process. In other words, according to his theory, government policies should be limited to providing security and basic rules, and unnecessary interference in markets should be eliminated. However, Smith also pointed out that in special circumstances, such as war or economic crises, government intervention is necessary. For this reason, economic and government policies should be flexible and timely.

2.  (John Maynard Keynes)

John Maynard Keynes, a British economist and one of the most influential economic theorists of the 20th century, developed his theories during the Great Depression. He developed theories, particularly about the role of the government in the economy, that led to major changes in the economic policies of countries.

Keynes believed that during times of economic crisis and recession, the government should actively intervene in the economy to increase demand and employment. Thus, according to Keynesian theory, economic policies should change in line with the economic situation.

For example, in times of crisis, economic stimulus programs such as increased government spending should be implemented. He believes that the government can solve economic problems through changes in tax and monetary policies.

3.  (Karl Marx)

Karl Marx, a German philosopher and economist, was one of the most prominent critics of capitalist economic systems. Marx developed a theory of class conflict and its impact on economic and political structures, in which politics and economics are intertwined.

In Marx’s view, economic policies are often shaped by and designed to benefit the class interests of the capitalist class. He believed that governments, as representatives of the ruling class, act in the interests of this class and make economic decisions based on their interests. This theory suggests that politics in capitalist societies functions as a tool to maintain the economic and class status quo. In particular, Marx was concerned with the relationship between capital and state power, believing that the economic policies of states often followed the economic interests of the powerful.

4.  (Friedrich Hayek)

Friedrich Hayek, an Austrian economist and philosopher, emphasized the importance of economic freedom and opposed government intervention in economic affairs. In his famous book The Road to Serfdom, he warned of the negative consequences of government intervention in the economy, believing that socialist and interventionist policies could become centers of state power that ultimately threatened individual freedom. In contrast to Keynes’s views on government intervention in economic crises, Hayek emphasized that free market policies could best allocate resources and prevent government growth. In his view, government policies often led to corruption and inefficiency, and economic freedom should be considered a fundamental principle in all economic policies.

5.  (Joseph Stiglitz)

Joseph Stiglitz, an American economist and Nobel Prize laureate in economics, has advanced new theories about the relationship between economic policies and global problems such as poverty and inequality. He believes that economic policies should be designed in a way that helps reduce inequality and promote sustainable development.

In his writings, Stiglitz emphasizes the need for government regulation of markets to prevent corruption and inefficiency. He also advocates behavioral economics policies, which argue that governments should pay close attention to individuals’ economic behaviors and motivations. In Stiglitz’s view, economic policies should not only improve economic performance, but also contribute to long-term social and economic sustainability.

6. (Thomas Piketty)

The French economist, in his book Capital in the Twenty-First Century, focuses on the concentration and distribution of wealth in capitalist societies. Piketty believes that capitalist economies naturally tend to increase inequality and that government policies should be designed to counter this problem and redistribute wealth in favor of the lower classes of society.

His research has shown that progressive taxes and economic adjustments can help reduce economic and social inequalities, and that for economic sustainability, government policies need to be considered more carefully. These world-renowned thinkers offer you different and profound perspectives on the relationship between politics and economics. Each of these individuals, with their own different approaches, has emphasized the importance of these two areas in shaping different societies and countries.

Examining the relationship between politics and economics in various social and economic fields

Politics and economics in art

Art is one of the areas that has a close relationship with politics and economics. Cultural and artistic policies can have direct and profound effects on the art industry and artists. For example, many countries in the world have special budgets to support art and culture, which can benefit or harm artists.

Art Economics:

This area examines how economic policies affect the art market, the price of artworks, and the financial situation of artists. Governments can help art and artists grow and develop by providing subsidies or tax exemptions.
Effects of Cultural Policies: Many governments use art to strengthen national identity or government legitimacy. This makes art not only a cultural tool, but also a political and economic tool.
Politics and Economics in Treatment

Health and economic policies in the field of treatment are among the factors that can greatly affect the quality and access to health services. This area becomes especially important in times of health crises such as pandemics such as COVID-19.

Health policies:

Governments can have a direct impact on the health of their communities by setting policies such as universal health insurance or vaccination policies. These policies typically also have an impact on the country’s economy, as health spending can take up a large portion of government resources.
Healthcare economics: Examining healthcare costs, the impact of tax and payment policies on healthcare, and the financing of hospitals and healthcare facilities is crucial.
Politics and economics in business

Given the globalization of trade and the impact of government policies on the global economy, the relationship between politics and economics in business is complex and vital. Economic decisions made by governments can have a major impact on trade, exports, imports, and global trade trends.

Trade policies:

Governments have a major impact on the world of business by imposing tariffs, export and import laws, and regulating foreign markets. These policies can shape global marketing and business strategies.
Global Market Economics: Global economic policies, such as international trade agreements and regional economic policies, affect the behavior of companies large and small. This can lead to changes in supply chains, production patterns, and even the development of new markets.
Politics and Economics in Marketing

In the world of marketing, economic policies and strategies can directly influence the marketing decisions of brands and companies. These effects can manifest in various aspects such as advertising, pricing, distribution, and market research.

Advertising Policies:

Governments can influence how products and services are advertised through their laws and regulations. For example, some countries have strict laws on advertising in the media, which can limit the marketing strategies of companies.
Consumer economics: Consumer purchasing power and consumption behaviors change based on economic policies such as interest rates, taxes, and support policies; as a result, marketers must respond to economic changes and government policies in order to design effective strategies to attract customers.
Politics and economics in the field of children

In the field of children, politics and economics have profound effects on their well-being, education, and health. Governments can improve or challenge children’s living and development conditions by adopting specific policies.

Social policies:

Governments can help improve children’s conditions with supportive policies such as child allowances, nutrition programs, and educational programs.
Family economics: The economic situation of families plays an important role in children’s living conditions. Government economic policies can improve or weaken families’ purchasing power and access to education and health services.
Politics and Economics in the Adolescent Sphere

During adolescence, politics and economics play an important role in shaping the future of adolescents. This sphere includes decisions related to the education, employment and social development of adolescents.

Educational policies:

Public and private educational systems, influenced by government policies, help develop skills and educate the next generation. These policies directly affect the unemployment rate and education levels in societies.
Employment economics: In some countries, economic programs and labor policies can affect the employment opportunities of adolescents. On the other hand, economic crises may lead to a decrease in employment opportunities and, consequently, an increase in social problems among adolescents.
Politics and economics in the adult sphere

At the adult level, politics and economics directly affect the quality of life, employment and social well-being of individuals. This sector includes macroeconomic policies such as social insurance, taxes and labor market policies.

Employment policies: Governments can influence job opportunities through labor laws, worker protections, and labor market regulations. In times of economic downturn, governments may seek to create incentives and support programs to reduce unemployment.
Social welfare economics: Many countries have established welfare systems to support adults in special circumstances, such as retirement or illness. These policies can have a major impact on the quality of life of adults.

Overall, the relationship between politics and economics plays a vital role in shaping societies and cultures in all areas, from the arts and medicine to marketing and employment.

A review of the history of successful global policies and economies and their impacts on development and progress:

Throughout history, different countries have faced various economic and political challenges. Some of these countries have been able to not only overcome the problems, but also achieve significant development and progress by adopting specific and innovative policies. In this section, we intend to examine some of these successful policies and economies without referring to political fronts and solely from the perspective of economic and historical analysis. A review of the history and economic developments of the world clearly shows how smart policies and economic strategies can have profound and lasting effects on the development path of countries.

1. Germany after World War II; free social economy

One of the most prominent examples of economic success in modern history is Germany after World War II. After the war, Germany was a devastated country with a shattered economy. However, with the implementation of social market economy policies designed by Ludwig Erhard, the West German Minister of Economy, the country was able to quickly rebuild and become one of the largest economies in the world.

• Reasons for success: Erhard’s policies included economic liberalization, a stable financial system, and a focus on social welfare. In addition, the government created space for economic growth and innovation by reducing market intervention and encouraging free competition. This approach, combined with support for domestic industry and trade, made Germany a model for post-crisis economic recovery.

2. Singapore: Open economy and focus on education and innovation

   Singapore, a small country with limited natural resources, has transformed from a colony to one of the world’s major economic powers. This change is largely due to its liberal economic policies, investment in education, and innovation. After independence in 1965, Singapore’s former prime minister, Lee Kuan Yew, introduced economic policies that included lowering trade barriers, facilitating foreign investment, and strengthening the country’s infrastructure.

   Reasons for success: By using a free market model and fostering higher education and technological innovation, Singapore has not only become a commercial and financial hub in Southeast Asia, but also a model for developing countries in the areas of education systems and workforce empowerment.

3. Japan; Economic and Industrial Reforms after World War II

   After World War II, Japan faced a critical economic situation. However, the country was able to quickly rebuild through economic reform policies overseen by the United States, and in the following decades it became one of the largest economies in the world.

   Reasons for success: Japan was able to build a modern and competitive industrial system using financial and technological assistance from the United States. The country’s focus on research and development, innovation in production, and education led to its rapid growth and development. In addition, Japan exploited an industrial economic model using the restructuring of the production system, which made the country one of the most advanced economies in the world.

4. Scandinavia: The social welfare model

   The Scandinavian countries, especially Sweden, Norway, and Denmark, are known as examples of successful social and economic welfare policies. These countries have been able to create a model of social welfare that has also contributed to economic growth.

   Reasons for success: The economic policies of these countries include high taxes and the distribution of resources to provide social welfare. These policies have reduced economic inequalities, improved access to health and education services, and improved the quality of life in these countries. At the same time, these countries have been able to overcome economic crises and achieve sustainable growth by maintaining a free economy and supporting innovation and entrepreneurship.

5. China: Transition from a state-owned economy to a free market

   China witnessed major changes in its economic policies in the 1980s and 1990s, with the start of economic reforms led by Deng Xiaoping. These reforms, which mainly included market orientation and foreign investment, transformed China from an agricultural country into an economic superpower.

   Reasons for success: By implementing policies based on export growth, stimulating demand, and increasing investment in infrastructure and manufacturing, China was able to quickly become one of the largest economies in the world. In addition, maintaining state control over key sectors of the economy and creating a competitive environment in global markets were also factors that made China’s success possible.

6. United States of America; Free Economy and Innovation

   As one of the world’s largest economies, the United States has achieved remarkable success throughout its history by using a free market economy and innovation in various industries. By focusing on research and development, investing in technology, and appropriate trade regulations, the United States has been able to become one of the most advanced economies in the world.

   Reasons for success: The United States’ economic policies, including supporting technological innovation, investing in key sectors such as technology and health, and creating a free market, have contributed to the prosperity of the country. These policies have created a competitive advantage and unprecedented economic growth not only domestically but also globally.

   A review of the history of economic and political successes in countries shows that there is no single model for success, but rather that each country has been able to exploit different policies and strategies depending on its specific circumstances. From Germany after World War II, which quickly became an economic powerhouse with a social market economy, to China, which achieved great success with economic transformation and the use of the free market, all indicate that effective policies can play a key role in creating economic and social development.

Politics and economics, two interdependent pillars!

Politics and economics, not only as two independent sciences, but also as two dependent and intertwined pillars, have always played a key role in shaping the structure of human societies. Politics, by setting rules, making macro decisions, and guiding the governance system, provides a context in which the economy can grow or, in some cases, suffer disruption. On the other hand, economics also affects political decision-making with a hidden but effective power; such that financial crises can lead to a change of governments or economic prosperity can strengthen political legitimacy.

In this article, an attempt was made to address the strange and deep relationship between politics and economics with an impartial and analytical perspective. We explored the conceptual roots of both fields, discussed important global theories, and examined the successful paths of some countries through the lens of history. What is clear is that without coordination and synergy between politics and economics, achieving sustainable, coherent, and efficient development is not possible.

A successful policymaker must have economic knowledge and know what direct effects his decisions have on people’s tables, capital markets, national production and employment. Also, an effective economist must use political analysis to have a proper understanding of the decision-making environment, institutional constraints and structural opportunities. This intersection of science and power is where the future of countries is determined.

This connection is also noticeable at the micro level; from the way household budgets are set to the investment decisions of entrepreneurs, all are formed in a political-economic context. Even a teenager’s decision to emigrate, or an artist’s decision to produce his work, is inevitably influenced by the existing economic environment and policies.

The relationship between politics and economics is like a complex dance between decision-making and outcome. Sometimes one advances, sometimes the other stagnates, but ultimately, without the coordination of the two, a beautiful and constructive movement cannot be formed. As history has taught us, development does not come from mere political slogans or from aimless economic growth, but rather from coordination, mutual understanding, and intelligent design between these two fundamental powers.

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