Politics and Economics are intrinsically and inextricably linked, and one connot be studied or talked about without studying or talking about the other.Political Economy according to Alonzo Potter teaches one how to increase production by teaching us to distinguish between true and false economy.He lamented the fact that previous economists and some even at his time looked at wealth creation simply as the disposal of surplus goods by a country. Ricardo clearly pointed out in his work – The Principles of Political Economy and Taxation – the exact science that measured the amounts and concepts to arrive at those amounts, as compared to the inexact and highly unscientific “if not totally false” ways in which theorists attempted to show the advantages of trade.
That labour and economy made up the wealth of economies was not easily seen by great thinkers such as Adam Smith and others before his era.
John Stuart Mill in his discourse regarded Mr David Ricardo as one of the few thinkers who had seen the true nature of the wealth creation by nations by means of application of scientific methods.
The term, as its name implied, originated because of the belief that the economy and politics could not be separated from each other.
As time went by, it was evident that the both sciences were separated; economics and politics both were sciences in their own rights.
If there is inflation in a country, then one of the procedures that could be used is cutting the budget deficit of a country.
The National Bureau of Economic Research (NBER) has recognised that pure economics alone is unable to explain “complex phenomena such as different degrees of economic development, quality and types of economic policies, income distribution, and quality of government organization such as corruption, protection of property right,” among other things.
Economic development affects the evolution of institutions and short run economic conditions affect political change and elections.” This then explicitly implies that there is an intrinsic interrelation between politics and the economy. David Caploe, Chief Political Economist of Economy noted that the renowned English Theorist and historian E. Carr described Political Economy as two things that are similar but not identical.
He stressed that when talking about political economy we talk about two things that are very different – but must always be examined together.
POLITICAL ECONOMIST HISTORICAL VIEWS Before the new theorists voiced their opinions on the causes of national wealth, the general concencus held by the society was one that modern economist hold now to be totally erroneous.
The view held of the influence of consumption, is one such view that heads the table.