The Relationship Between Politics and Economics - Essay Example

Economic and political systems are tightly intertwined in ‘the real world’ for several reasons, but they are separate social sciences. This is due to the workings of democracy. The definition of both concepts is the best starting place. Economics is the social science that studies production, distribution, and consumption of a society. The economic systems pertain to production, distribution, and consumption of a society. Political systems are the process by which groups of people make decisions.

The political systems make decisions on how to run modern day governments. This includes how to proceed with the economic system. Political systems would not have the money or means to decide without the economic systems. For example, the American political system would not have money or means without the taxation on the American economic system. The American economic system would not function well without laws passed by the American political system. Thus both of the entities are intertwined by the essence surrounding both systems.

The problems occur when production, distribution, and consumption is not managed through proper laws. An example would be the current American banking crisis. Uneven distribution of credit allowed too much consumption without enough production of real money. Banks would loan $100,000 to people that could not afford the mortgage. Then the banks would foreclose. However, banks then became property poor, with no real money value. Without proper laws for the balance of production, distribution, and consumption the whole system can crash.

That is why there must be separation between the two systems. So a checks and balance system can be in order. The economic system called feudalism is related to the Middle Age economic system. This system included lords, vassals, and fiefs. The lords are possessors of land. Vassals are works of the land. Fiefs are the land or farms. For this system to work, goods were produced for lords by vassals through fiefs allotted them to work. There was little or no money. Goods, livestock, and services were provided by the workers for their bosses on the boss’ land.

The feudalism economic system survived until a few factors changed. The Renaissance, the decrease of the profession of being a soldier, and the Industrial Revolution created the decline of feudalism. Each of these reason chipped away at the feudalism economic system. The Renaissance changed the balance through knowledge. More young men wanted to learn instead of becoming a soldier for their lords. The lords wanted to learn instead of going to war. This led to the enlightenment that there was more to life than work and service to an individual’s lord.

This created an imbalance between the production, distribution, and consumption of goods. When there is an imbalance between these three things the economic and political system do not continue without change. Once the profession of being a soldier was eliminated, men had to find other jobs. Factory workers, farmers, and clerics became the ordinary worker’s profession. This was the beginning of not only democracy, but capitalism. Individuals started working for wages, real money. This money could buy goods and property.

The political systems made laws to keep up with the changing economic systems. The Industrial Revolution created devices and inventions that maximized production and distribution which increased consumption. The balance was not in place. The political systems in the countries were democracy during this time. Feudalism was no longer even a memory. The system of capitalism had taken over. Democracy or feudalism, production, distribution, and consumption must be kept in balance in order to have a harmony between the political and economic systems.

Thus political and economic systems must be studied separate in order to keep these three elements in balance.