The minds behind political economy

“How would you see political economy?” a friend asked me. The question sounded simple, yet I was not entirely sure what he expected from me. I asked him for clarification. For nearly fifteen minutes, we discussed its meaning, occasionally disagreeing and attempting to redefine it through our own understanding.
After all, this is what readers, writers, and intellectuals usually do. They question what appears obvious. But one question remained in my mind: Is political economy about politics, economics, or the ordinary people living under both?
Let me explain political economy in a simple way. Imagine a country where the government makes decisions about taxes, salaries, subsidies, employment, education, and investment. These decisions influence how people earn, spend, save, and live. Political economy is about understanding the relationship between political power and economic decisions, particularly who benefits from those decisions and who pays the price.
In other words, politics decides many of the rules, while economics explains much of what happens under those rules. But the consequences are experienced by people.
I have always wondered why some countries are rich while their citizens remain poor. Why do some nations possess enormous natural resources but struggle to provide decent employment, education, and healthcare? Why do others, with hardly any natural resources, manage to build prosperous societies?
Take Norway and Nigeria, for example. Both possess considerable petroleum resources. Yet their economic experiences have been different. Norway has managed much of its petroleum wealth through institutions and long-term investment, while Nigeria has struggled with inequality, governance challenges, and dependence on oil revenues. The difference is not simply about how much oil exists underground, but how wealth is managed above the ground.
Singapore offers another interesting example. Without significant natural resources, it transformed itself into a successful economy through education, investment, planning, and effective institutions. These examples remind us that national wealth is not merely a gift of nature. It is also the outcome of political decisions and economic management.
The economist Amartya Sen once challenged the conventional understanding of development by arguing that genuine progress must expand people's freedoms and opportunities. His thinking raises an important question: What is the purpose of economic growth if ordinary citizens cannot improve their lives?
Joseph Stiglitz has also written extensively about inequality and how economic systems sometimes favour those who already possess wealth and influence. His arguments remind us that a growing economy does not automatically mean a fair economy.
Now, consider something closer to our daily lives. A government announces an increase in taxes to strengthen public finances. Economists may welcome the decision because it improves government revenue. But what happens to the family whose income remains unchanged while living expenses continue rising?
Or imagine a government announcing billions in foreign investment. Newspapers celebrate, stock markets respond positively, and politicians describe it as an economic achievement. But what does this investment mean to an unemployed graduate searching for his first job? What does it mean to a small entrepreneur struggling to survive?
These are the questions political economy should encourage us to ask.
I am not suggesting that governments should stop collecting taxes or that businesses should stop making profits. Without investment, enterprise, and public revenue, economies cannot function effectively.
However, economic policies should not be judged only by how much money they generate, but also by how they improve people's lives.
Sometimes, I feel we have become so fascinated by economic figures that we forget the human beings behind them. We celebrate GDP growth, foreign investment, and rising corporate profits, but rarely ask whether a schoolteacher, a nurse, a factory worker, or a small shopkeeper is becoming economically better off.
A country may become richer while many of its people feel poorer. This is perhaps one of the greatest contradictions of modern political economy.
My friend eventually asked me, “So, is political economy about power or money?”
I replied, “It is about both, but we should never forget the people.”
The real success of political economy should not be measured merely by how powerful a government becomes or how wealthy corporations grow. It should be measured by whether ordinary people can live with dignity, opportunity, and economic security.
After all, what is the purpose of a wealthy nation if its people cannot enjoy the wealth it creates?