Politics and Economics; Opposing Forces

By Adam Walker, Economics Correspondent

Obamacare Churchill

Politics & Economics: Two Forces Pulling Against Each Other

Following the US Government shutdown in late 2013 there has been speculation surrounding the fragility of global economic wellbeing when it is at the mercy of party politics, in particular when a few idealists manage to halt the entirety of a democratic system through a reluctance to compromise.

However, the bigger question is whether politics and economics will ever be a successfully functional partnership in a democratic society, or is there a growing divide between the two schools of thoughts and ultimately opposing goals for each of them?

The Basics Say It Should Work, But…

Fundamentally, politics encompasses the activities associated with the governance of a country, whilst economics is based around using the limited supply of resources to satisfy unlimited demand. At this level (and with the assumption that all other things are equal) the two should work harmoniously together, at least from a macro perspective, with political bodies communicating demand to suppliers of goods and services.

However, this model fails to take into account the effects of democratic opinion and, at a more psychological level, the effects of human nature on political agendas. As individuals there is an understanding of altruism and how our actions will affect generations to follow, conversely as a group of individuals our priorities tend to shift to policies that provide quicker benefits for ourselves. Our biological nature means that it is our desire to achieve as much as possible with minimal sacrifice or effort and, although on an individual level this may not be true, as a civilisation this is evident in our behaviour.

Does Healthcare Suffer From Our Demands?

This is most evident within the context of the NHS, where the British public want to see reduced waiting times (which reached a 5-year high in August 2013), greater levels of access to their doctors and more comprehensive treatment. At the same time, however, there is a reluctance to see income tax or national insurance tax increase, two of the primary sources of funding for the NHS.

David Smith discussed in his blog last year the cuts in government spending and benefits that accompanied the £3.8 billion investment into aligning health and long-term elderly care within the NHS. The cuts to benefits were met with a backlash from the public whilst at the same time local governments voiced their concerns about whether the health reforms would be enough to cover both young and adult patients as well as the elderly. So on the one hand we want to maintain the current level of benefits offered to the public, but we want funding for more comprehensive healthcare to deal with an ageing population, and thus a paradox exists.

Is The System Broken?

Churchill famously said “Democracy is the worst form of government, except for all those other forms” after he lost power within British politics. The intrinsic meaning has been discussed at length, with some stating it as a commentary on society’s inability to help itself and others perceiving it to be a bitter remark from a man who had seen the end of his political career. Either way he may have defined this problem of economics and politics rather beautifully, questioning whether what we want is necessarily what is best for us as a society?

In America, there has been a large amount of opposition from both the public and Republican Party members over the past few years following the Obama Healthcare reform. The bill, which aimed to provide affordable health insurance plans for people who were otherwise unable to pay for it, was described by many as one of the most groundbreaking political decisions in recent US history whilst others maintained it was more of a hindrance than help.

Jon Stewart agreed a degree of criticism was warranted, saying: “I’m not saying Obamacare is perfect. It’s not! It was designed by congress and nothing designed by congress is perfect.” He did go on to say, however, that at least this reform was taking steps to solve issues in the broken US healthcare system. At its heart the reform is altruistic and designed to benefit a vast number of American citizens who cannot afford healthcare, yet 45 per cent of American voters opposed it in 2013. By all accounts it would appear that, accounting for a margin of error, almost half of the country would be happier without affordable healthcare.

So How Do We Evolve?

I’m not saying that either politics or economics should be prioritised over each other, but there is clearly a flaw in our societal structure and the longer we leave it unchecked the greater the divide will become. Perhaps Churchill was right and our only choice is to find the next “least worst” form of government, sacrificing our desires as a social body of people for those of future generations, or maybe democracy will hale the end of Western civilisation as we know it.

Are we too stubborn to change or too afraid to gamble our own lives for those of our grandchildren? Most importantly of all, are we really helping ourselves right now or merely kicking a tired democratic can down the road?

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