Business Up for Debate: Politics or Economics First?

One of the fundamental questions about economic reality has always been: who influences whom, the economy or politics or vice versa? The assessments are very different and a good part of them are valid. At a time when there will be presidential elections in 70% of North America  – the United States and Mexico – it is appropriate to analyze the relationship between these two realities that govern the world: economics and politics.

We find ourselves in campaigns, debates, information, bilateral meetings, strategic alliances, and presentations at important forums. All of this should lead companies to consistent analysis.

Economics, the way of organizing the environment (the word economics is derived from the Greek word oikonomia, whose meaning is “household management”) and politics (which is drawn from the Greek word  and means “affairs of city-states”) are continually touching and distancing each other in an exercise of communicating vessels or pulleys exerting their respective forces. The physics that develops between them is polyvalent and worthy of continuous study.

Gilberto Rincón Gallardo, a Mexican politician, now deceased, founder of communist parties first and then of social democratic parties, who even spent some days in jail as a political prisoner, was of the opinion that if democracy does not reach the people's pockets, it ceases to be a valuable political system. Politics can have no other objective than the quality of life and coexistence among citizens. To this end, ethics and law contribute as priorities.

In political policies, the fundamental issues for the economy are always considered. On paper, everything survives relatively easily. But then, during the campaigns, a long list of welfare promises, such as social assistance, lower taxes, and higher pensions, is more likely to be seen. No politician in a campaign would think of talking about industrial reconversion or the inability to pay pensions in the medium term.

Few companies devote sufficient time to political analysis and presidential elections. A good part of the commentaries remain in the form of conjecture that encourages after-dinner conversations. And yet, there are political decisions that can radically change business plans. Furthermore, not only is there a lack of analysis, but the analyses that are made tend to be interpretative in order to understand the sustainability of the business in terms of sales and profits and not so much in terms of long-term sustainable development.

There is a total symbiosis between politics and economics. They go hand in hand in all the paths that correspond to them or occur to them. The economy enjoys a certain autonomy and can grow and develop according to the creativity, investment and strategic capacity of individuals and human groups. But it is politics, of whatever bias, which establishes the regulation (balanced, over-regulation, and so on) for its development. From the harmony of the two spheres arises the growth of countries.

Plato and Aristotle gave a good account of the priority of politics in directing the economy. Both dedicated important pages of their books to economics. Plato in The Republic and Aristotle in Politics.

Aristotle insisted in Politics on a combination of economics and politics, through which it is necessary to deal with what is useful or moral for the “polis” with a clear focus on the good life and eudaimonia (happiness), an objective to which the great philosopher always referred to reality and justice as a vision that balances societies. Plato spoke of politics in The Republic as the cause of public welfare. Aristotle started from reality, understanding the usual difficulties of economics with an overdose of realism, while Plato, starting from the Aristotelian basis, dreamed of ideas from the myth of the cave.

Both philosophers thought deeply about binomial politics and economics and proposed ways to reach a healthy coexistence. The economic managers of the time paid attention to these aristocrats of thought.

Companies are an essential part of the economy and move in the midst of the political environment. They usually do so appropriately, but often after seeing the consequences of the storms instead of investing in forecasting the storm clouds. Analyzing, projecting and preventing is always more efficient and cheaper for everything to work as it should. Political analysis and economic projection require specialists. They are consultants with a more academic, research and theoretical profile; but reality shows that in electoral times all this theory works to maintain a healthy economy and business life.

Companies have the opportunity to understand that consultants in anthropology, sociology, politics, and economics can be the best investment because they contribute to proper business development.