Politics and Economics; Two Facets of a Coin Essay

1188 WordsMay 16, 20095 Pages
In this chapter, Barry Clark gives a comprehensive exploration to the fundamental basics of political economy. He primarily defines economics as the individual pursuit of prosperity through the market, while politics as the communal pursuit of justice through the government. Clark distinguishes between the two terms using the primary goal, institutional arena, and primary actor. Economics' goal is prosperity which is the effort to achieve the highest, possible, and material standard of living from available resources. In order to achieve prosperity, society has to maintain efficiency, growth, and stability. Moreover, economic activity like; exchange of commodities and money, occurs in the market and it is always pursued by acting as autonomous individuals. On the other hand, politics is the collective activity that is associated with the government in order to attain justice which protects rights of the citizens. Distinguishing between politics and economics using each aspect of these will still be ambiguous because both sciences are concerned with organizing and coordinating human activity, marshalling resources, managing conflict, allocating burdens and benefits and providing for the satisfaction of human needs. As markets and governments are the main actors in political economy, Clark studied each institution from political and economic aspect, and examining each institution’s advantages and deficiencies. Firstly, the market is the system of exchanges in which individuals choices to supply or demand resources or product interact to determine prices. As market is an economic institution, it has to achieve efficiency, growth and stability. In a perfect competitive market, resources will be directed toward their most highly valued use resulting in an efficient economy in which no person can be better off without making someone worse off. However, there are

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