Politics and economy

Perhaps a better caption could have been politicians and economics but a fair sense of judgement prevailed. The subject is one of an incredible juxtaposition. The words apparently contrast each other.

Politics and economics together can be a phrase – actually an oxymoron, where the two words are opposite to each other. The simplest school definition of the subject of economics is that, it is a social science, where enquiries are made on how various societies effectively use the scarce resources to produce for equitable distribution of goods and services; essentially, a study of scarcity relating to production, distribution and consumption of goods and services.

Politics, on the other hand, is described as activities that are associated with the governance of a geographic area where power relationship between individuals and institutions is established. Political scientists define it as the struggle between many interested and vested groups over ’power ’and the ‘scarce resources’.

The almost divine definition of politics by Aristotle’s hierarchical method of philosophy refers to politics as the study of communities involving higher priority than ethics, that concerns individuals.

In the present day and time any reference to ethics in politics must be considered a crime against ‘truth’. Those who spend time, either by way of election or selection in devising common aims and objectives between people, so that they can afford to live in peace and harmony are called “politicians”.

The use of power by a single person or by a group of people (say the Cabinet or the National Assembly) is a fundamental outcome of any electoral process. The voluntary or involuntary submission to the power that directs, either through inspiration or through popular acceptability is considered the ‘art of politics’.

Economic policy of any nation is a direct reflection of the political ideology of the people of a society who are willing to accept the precepts of the ideology. In turn, political ideology relates to certain well-defined sets of ethical ideas, doctrines and principles, inclusive of the myth that aims to establish a stable social order.

With the basic definition and understanding in place, the provocative question that emerges is, do politicians meet the criteria to be entrusted with economics of a nation? I recall reading an apt statement somewhere that ’economics is too serious a business to be left alone for the politicians to manage“.

Regionally, or maybe even globally, there would be handful of politicians who may qualify to have a sound and fair understanding of economics. Margaret Thatcher was one of them. With a degree in chemistry from Oxford, she sought a job with ICI, as a researcher – she was rejected.

Her candidacy, interestingly, was rejected due to the recording of the interview panel, who wrote, ‘This woman is headstrong, obstinate and dangerously self-opinionated.’ The qualities which got her rejection were deployed with success once she became prime minister of Britain. The economy of Britain was in shambles.

She handled inflation with a high interest rate environment of 17 percent, putting the economy to serious risk of recession. Her monetary policy was persistent and ultimately her notion of controlling inflation for growth paid-off. Of particular interest to me as a student of economics are her views on inflation.

She saw it as a national threat: ’Inflation destroys nations and societies as surely as invading armies do“, and on another occasion, she remarked, “Inflation is the parent of unemployment. It is the unseen robber of those who have saved”. She learnt her economics well enough to pursue her political ambitions and reaped benefits. But not all politicians are Margaret Thatcher.

Indira Gandhi studied modern history at Somerville College (Oxford) and never pretended to understand finance or economics – she relied on her able and competent deputies to manage the economy. Her father was a socialist by design. Benazir Bhutto studied at Oxford and Harvard. She took a degree in philosophy, politics and economics. But like Indira she left economics to the experts.

Z. A. Bhutto had a first degree in Jurisprudence and an LLM degree in law and an MSc, degree in political science. He understood economics and politics well but fell victim to the populist socialist slogan and he conjured an economic system that he referred to as ‘Islamic Socialism’.

He wrecked the economy by nationalising key industries, although this scribe feels there is nothing wrong with state ownership of enterprises but what is significantly wrong is for the state to “manage” business enterprises. Governance in these situations is lost to bureaucracy, corruption and nepotism.

Hasina Wajed, the powerful former PM of Bangladesh, has a degree (undergraduate) in Bengali literature yet, Bangladesh’s economy did exceedingly well during her tenure. While her perennial nemesis, Khaleda Zia, described herself as “self-educated”, she had no formal training either in Politics or economics – the GDP growth rate was inconsequential.

Sirimavo Bandaranaike, who was the first female Prime Minister of the world, was a school leaver, who was influenced by socialist thought; she tried to turn Sri Lanka (Ceylon then) into a socialist republic by nationalising organisations in banking, education, industry, media and several trade sectors.

She made a mess of the economy, but being politically astute, she kept returning to premiership every now and then until her retirement, which was two months prior to her death.

It is heightened stupidity to consider that all politicians are good economists or even to think that they all understand the intricacies of finance and economy. The type and quality of questions asked from experts during the sub-committee meetings of the parliament is reflective of their unique quality of education, by and large. The exceptions are a needle in the haystack.

Politician must pay heed to the 19th century prime minister of Britain William Gladstone’s comment: ‘Finance is, as it were, the stomach of the country, from which all the other organs take their tone’. Politicians bereft of knowledge of economics and finance will have no vision to last beyond their life time. Politicians with some exceptions are artful dodgers like Bill Sikes of Oliver Twist fame. They render serviceability of all vices to the cause of virtue.

‘He knows nothing; and he thinks he knows everything. That points clearly to a political career’. (George Bernard Shaw). From the life of Akbar the Great (wonder who first called him great and for what reason?) our politicians have a lot to learn.

Firstly, he never pretended to be educated (formally) or be a learned intellectual, and secondly, he used no devious means to get an educational institute to issue a false qualification or degree.

He was humble enough to recognise his weaknesses. He, therefore, collected the best minds, who were competent and not “Sifarishies” to hold positions of authority and respect in his court.

His kitchen cabinet was full of ‘technocrats’ who came to be recognised in history as “Nau Ratans or “Nine Jewels”. Todar Mal for revenue, Tansen for music, Faizi for literature, etc., were subject matter experts, all ready and eager to guide the Emperor for framing laws and principles.

The cabinet must have “Nau Ratans” and not a crowd of opportunists. Only nine, not fifty, to rule an area, which was much larger than Pakistan. As the Chief Minister of Baluchistan put it recently, bemoaning, he informed that to distribute zakat funds amounting to Rs 300 million, the administration will spend a billion rupees.

In his lifetime he was known only as Emperor Akbar, the historians in later years bestowed upon him the epithet of “great” in complete historical distortion to the reality. The man was simple and humble, but wise.

In recent and contemporary history few politicians have performed with outstanding results in the management of the economy. The prominent being the following: Chou en Lai, Deng Xiaoping, Zhu Rong Zhi and Xijing Ping (People’s Republic of China); Park Chung Hee (South Korea); Mahatir Mohamad (Malaysia); Shaikh Mohammed (Dubai); Lee Kuan Yew (Singapore); and Dr. Manmohan Singh (India). These leaders recognised the need to concentrate on economic development for uplifting the standards of living of their respective populations.

Dr Manmohan Singh was first an economist, then a central banker; followed by being Governor, Reserve Bank of India, then as finance minister to prime minister Narasimha Rao, who was inept, and innocent of economics.

Dr Manmohan Singh carved and architectured India’s economy with economic vision and foresight. Today, the Butcher of Gujarat, Narendra Modi, is reaping and harvesting the toil and effort of Dr Singh. Politicians who show some skill in economy management are always successful.

Democracy is certainly the best revenge upon the efficiency of doing the right thing. Politicians look at next elections and hence their minds are constrained from indulging into dreaming for a better future of their countries.

“You can’t go back and change the beginning, but you can start where you are and change the ending.” (C. S. Lewis). Leaders must push back the past into the limbo of lost memories and focus upon the now( present) to ensure a better tomorrow.

A senior colleague from yester years (London days) wrote the following for a summer Business School in Europe (he has authorised me to use his writing but desired anonymity): “By year 1997…I had become the Communications Director of what was then the largest bank in the world — here I met, face to face with … [moral dilemma of prioritising spiritual devotion over financial gain]. In this role I discovered how the system worked… It seemed to me that after these experiences in business practice, as long as people remain ignorant of Economics and money creation, at best, a poor quality of education compared to the elite, the division between the rich and the poor could be forever with us.”

This is exactly what politicians end up doing, either deliberately or unintentionally. Without understanding the nitty-gritty of economics they take far reaching decisions that end up serving only the vested interests. Politicians pretend to decide about clean water and climate change with almost zero understanding of their many facets.

There is a need for planned obsolescence of the current crop of political leadership, largely found in the developing countries. Politics and economics are like Siamese twins; inter-twined and conjoined.

It was Z.A. Bhutto who had thundered that political independence is meaningless without economic independence. He knew to be an effective politician, one has to be good at economics.

Copyright Business Recorder, 2025