What is Political Economy?

1.  

   Political economy  in simple words is the study about on how  the policy decision that have been made politically  that gives effects to the Economy.  Aristotle believes that government, Society and Economy are one entity of  the nation. Politic and economy cannot be separated.

2.       The normative believe is that government should do something to ensure Just Prosperity for the people in the nation.

3.       Basically the debate of political economy starts from the leftist (radical) which is Karl Marx and the rightist Adam Smith by promoting free market. It is the debate on how much government should intervene in the economy. It is the question about whether Should it be left alone, or should  be controlled?

4.       The people elect the government because of the public policy that almost always have economic ramification. In short, almost everything in politics involves economy.

5.       If the economy is good, so government can provide a welfare to the people and be considered as good government. For example , education,health service,facility and subsidies.On the other hand, If the economy is not well , the government has to suffer deficit and cut expenditure.The welfare policy might have been retracted and they will be considered as bad government.

6.       Therefore, good government is government that have Good Policy of Political Economy.