What is the difference between economical and political

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It is a multidimensional term that has been defined using different connotations. And negatively, it is defined as a field of manipulation or deception. As the science and art of government, it is found in the formal structures of governance viz the legislature, the executive, and the judiciary. And as manipulation or deception, Politics can be found in all forms of social interactions that involve a struggle for power.

Nonetheless, certain characteristics of politics are common in all the above-mentioned definitions:. It is a branch of social science that is concerned with the study of the material conditions of a society. These include production, consumption, and distribution of resources, demand and supply, and so on.

As a discipline, it employs scientific methods to study how individuals, groups, organizations, and society at large make use of scarce resources to meet its ends. Political instability makes a country less attractive from a business investment perspective, so foreign and domestic companies doing business there must often pay higher insurance rates, higher interest rates on business loans, and higher costs to protect the security of their employees and operations.

Alternatively, in countries with stable political environments, the market and consumer behavior are more predictable, and organizations can rely on governments to enforce the rule of law. As you can see, the desirability of a country as a potential market or investment site depends on a host of complex, interrelated factors.

To further complicate matters, conducting business globally involves the uncertainty of exchange rates. For example, the exchange rate for the U. Currency exchange rates have been based on a variety of mechanisms over time, including fixed, floating and managed floating systems. A third category includes all other mechanisms that are used to maintain a stable currency value relative to another currency or a composite of currencies.

Most industrialized nations now use a floating currency exchange system managed by a Central Bank. Thus, the relative value of a currency is largely determined by supply and demand, including Central bank or government action, investment and trade. But one of the most important factors is exchange rates. While resources in a communist society are owned and controlled by the government, individuals in a socialist society hold property. People can still purchase goods and services under socialism, while those who live in a communist society are provided with their basic necessities by the government.

The term political economy refers to a branch of social sciences that focuses on relationships between individuals, governments, and public policy. It is also used to describe the policies set by governments that affect their nations' economies. The main concern of political economy is to determine the relationship between governments and individuals, and how public policy affects society.

This is done through the study of sociology, politics, and economics. Some of the characteristics or themes of a political economy include the distribution of wealth, how goods and services are produced, who owns property and other resources, who profits from production, supply and demand, and how public policy and government interaction impact society. The types of a political economy include socialism which states that any production and wealth should be regulated and distributed by society , capitalism where private owners control a nation's industry and trade for profit , and communism the theory where all property is publicly-owned and everyone works based on their own needs and strengths.

Adam Smith is generally considered the father of economics and the father of the political economy. Oxford Bibliographies. International Monetary Fund. Comparing Economic Systems. Internet Encyclopedia of Philosophy. Adam Smith Institute. Stanford Business. The College of New Jersey. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile.

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