The Personal is the Political Economic

•Who makes economic decisions?•What is the current political economic context in which those decisions are made?•What are the principal political economic challenges we face?

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• Study ‘economics’ would offer guidelines for ‘making money’?

• Sometimes disappointed to find that it is about how the economic system works rather than how the system can be worked!

• People are likely to make more astute business and financial decisions if they know about the economic, social and political forces shaping the business and financial environment.

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• Taking a personal perspective helps focus attention on how individuals are affected by broader political economic forces.

• It provides a way of understanding the connections between the individual’s economic circumstances and the functioning of the economy as a whole.

• It also makes the link between ‘micro’ personal choices and ‘macro’ social choices.

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Economic Decisions

• In our day-today lives involve many economic decisions. Most of these are small-scale and short-term and of no apparent significance beyond our immediate family and friends. But in the aggregate, they shape the economic environment which we live.

• Some such decisions, showing various social and economic roles, are described below.

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As students• invest in our economic future and pursue personal

development.• How much education we undertake and how many

qualifications we acquire are likely to have a bearing on our future economic opportunities.

• These are important strategic choices about investment in ‘human capital’.

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As consumers• Daily decisions about which of the baffling array of

products we will spend our disposable income.• Also decisions about how prepared we are to forgo

the immediate gratification of consumption in order to accumulate personal savings.

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As workers• Face with constrained choices about the jobs we seek

and the hours we work.• Make periodic strategic decisions, individually or

collectively, about the stance to take in negotiations with our employers about wages and conditions of work.

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As business decision-makers• Make strategic decisions about employment and

wages payments. • Periodically review the methods for producing goods

and services, decide how much they will invest in new production facilities, decide on the prices for their products and review sales promotion practices.

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As speculators• Continually review their portfolio of assets, deciding

what to buy and sell according to their judgements about future price movements and the possibility of making capital gains.

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As bank managers• Decide about making loans to their clients• Make decisions about interest rates offered to

depositors and charged to borrowers• The margins between these borrowing and lending

rates are the principal source of banks’ profits, and they are kept under continual review.

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As government ministers• Especially those in key departments like Treasury and

Finance, make frequent adjustments to economic policies.

• In response to changing economic conditions in national and global markets, and to political pressures to modify their policy settings.

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An environment of economic uncertainty

• Technology are transforming the way goods and services are produced and, the way information is transmitted; barriers to economic intercourse imposed by the ‘tyranny of distance’ and national boundaries are being eroded; growing economic power of transnational corporations (see table below).

• The nature of work is changing; persistent unemployment; more women are in the waged workforce, but the allocation of household tasks has not changed.

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Cont.

• The proportion of older people in the population continues to grow; issues about intergenerational income transfers; the capacity of governments to manage those processes seems to be regularly threatened by the difficulties of maintaining systems of taxation to generate the necessary revenue.

• Increased income inequalities both within and among nations; the slowdown in economic growth rates in the wealthier nations; imbalances of trade and debt between rich and poor countries highlight the long-established problem of economic inequality.

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Three trilogies

It is taxonomic in character– emphasising classification rather than explanation. It draws attention to some broad social choices and to some tensions that arise at the interfaces between various types of economic arrangement.

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1. Institutions: market, state, community

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• Draws attention to the different ways in which economic activity can be organised.

• Goods and services may be produced for exchange in the market. The state usually becomes the economic manager. Production and distribution could occur directly in the community to serve community needs.

• The balance between public and private sectors of the economy, voluntary and government welfare provision, and the extent to which social life is structured by market processes.

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2. Spatial scales:global, national, local

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• Spatial scales at which economic activities can be organised and coordinated.

• How these three spatial scales are articulated and how best to strike a balance between them are key issues.

• From a political perspective, these concerns manifest in the challenges to national sovereignty, the development of global cities and regionalist responses.

• From an analytical perspective, this means that the spatial dimension is an important aspect of political economy.

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3. Systems:economic, social, ecological

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• Economic activities depend on certain social and ecological preconditions– e.g., the availability of labour and natural resources– and they have major social and environmental consequences.

• The tensions affect distributional equity, ecological sustainability, and the quality of life.

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Final thoughts• As individuals, we all participate in the political economic

drama. It helps to know what is going on and what our options are, individually and collectively.

• We must try to understand the economic institutions and the structures of political economic power that shape our lives, for better or worse.

• We have to understand the forces driving the economic changes and shaping the political priorities and possibilities.

• More than that, we have to identify what can be done to produce political economic futures more in keeping with our individual and collective needs and aspirations.