Political Economics or Economics of Politics
While Finance is a branch of economics that deals with investment and money management, economics has been defined as a social science of production, distribution, and consumption of goods and services. To me, economics is just but a mirage.
An economist will still tell you that we have two branches of economics. That is Micro and Macro. While micro-economics addresses the smaller individual items and firms on resource allocation, Macroeconomic is the aggregation of all micro-elements. For example, GDP, public debt, National accounts etc.
What we need to know is, a big chunk of macroeconomics is almost 70% political. In fact, I would go on to argue that, the direction of macroeconomics has a nexus to the direction of microeconomics. For instance, if the government has decided I pay 8% VAT on fuel, the micro nature of succeeding impact is purely based government decision which is macro in nature. When you hear the President commenting on how much bus fares should be on the precincts of fuel VAT, then you realize a macro angle taking stepping into a micro perspective. But this is a story for another day.
When IMF decided that we need to pay VAT on fuel to boost our revenue and reduce our debt, they used all nature econometric model to arrive at this conclusion. However, the political aspect is usually very key. This kind of things requires a lot of political goodwill or mischief for that matter to pass. If politics does not support an economic idea, that idea is as good as a dream or dead. Let’s just say that economics is controlled by politicians. What we professionals do is just to try to bring out the underlying nature of science behind it.
That’s why an uneducated politician who knows political games very well will educate you on fiscal management more than a development economist. This is the main reason behind many people with interest in politics studying Political Science. However, I have never been convinced that science exists in politics. Politics is purely an art. Politics is the art of mischief, deceit, shortcuts and above all thuggery.
Politics determines how much I owe China now and in future (Finance and economics). Politics determines how much I owe the government in taxes (Finance and economics). Politics determines how expensive goods and services will be(Inflation).
Those who play political games well, succeed in power, financial independence and above all control of resources. Resources which are fully an element which ECONOMICS is all about.
In short, even if technocrats will be all over TV stations convincing us why the recently passed Finance Bill is necessary or not is not of importance. “Of importance is life” which we have left in the hands of political goons whom we call “Waheshimwa” but have nothing honorable in true nature.
If our production of maize, sugar, fruits, bananas are going to waste or stolen through government coffers, then why do I need an economist to sing the gospel of GDP growth.
If I don’t have food or have no money to buy food, I don’t care about GDP.
If I cannot visit any hospital in my village and feel safe on the treatment, I don’t care about GDP.
If I cannot afford to take my child to school or move from one place to another due to bad roads, then I don’t care about GDP.
In short, Economics is overrated. Pure economics lies in the political number line.
So, you want to be a good economist?? Join Politics. Your Vote.
Meanwhile Lipa Ushuru, Jenga Kenya.
