The Importance of Political Economy Science

Jimmy/ August 29, 2020/ political economy, Political science

The economic issue is one of the hot issues raised by politicians. These important issues discussed in the economic field such as inflation, poverty, employment opportunities, and economic growth became the main campaign topics. The close relationship between economics and politics has been recognized for a long time. However, very few politicians have a good understanding of economics, so when they talk about how the economic performance of a country is often not in line anymore.

Political science and economics
It is a social science unit and the two branches of science have a very close relationship. Political science is related to the dynamics of power in a nation or society. Now in our country, Indonesia, the holder of power is determined by a party or a group of parties or often called a coalition. The power possessed by the power holder gives authority to individuals in influencing the behavior of individuals in the community, while economics means the relationship with the resources available in a country/region. As we know, these resources are limited so that economics focuses on how to allocate limited resources to meet unlimited human needs. Some of the literature includes technology and capabilities or entrepreneurship as resources. Thus it can be seen that in allocating resources among community groups, the power is held by the ruling or political leaders. By using existing resources in a country, leaders who have power have the right to determine what types of goods and services are produced. The determination of imports of strategic commodities is also determined by the holders of power. Based on this description, it can be seen that political power affects how the economic system in a country works. However, in other cases, economic strength can affect political power in a country. For example, large companies or groups of people with economic power can lobby politically so that they can influence the political, institutional, and legal situation in that country. Look at how President Trump is more concerned with economic considerations in maintaining his relationship with the Kingdom of Saudi Arabia in handling the Khashoggi murder case.

The importance of understanding economics
As described above, politics and economics are two things that are closely related. To quote my professor, economics and political science are inseparable lovers. This means that politicians must understand economics and vice versa. The explanation is simple, if a politician wants to be in power, he must convince voters that the economic program he is carrying out will benefit his voters. To understand economic indicators well, strong back-up from the economic team is needed. What economic issues to raise must be thought through and based on existing facts and data.
Approaches in Political Economy
Public Choice Approach

Public choice is an individual’s attitude in determining their choice rationally. In the political economy, the analysis focuses on actors. Actors are considered as actors of economic and political activities and are based on the basic assumption of methodological individualism, which places the rational attitude of the individual in non-market institutions.
Neo-Marxist Approach
The neo-Marxist approach in political economy emphasizes the holistic nature of the analysis as a whole, regarding the importance of macroeconomic aspects of the economic system and political system. Also, this approach has a model that has a comparative aspect, namely trying to compare it explicitly.

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