Why economic logic no longer explains politics

One of the predicaments of contemporary debates on society and world order is growing analytical laziness. This trend is visible across the ideological spectrum. The long dominance of economy-first frameworks, be they Marxist, liberal, or technocratic, has much to do with this, particularly the reflexive tendency to place economic factors or class struggle at the centre of every argument, whether in society or even politics. The near knee-jerk assumption that economic logic provides the foundational basis for social life and contemporary political conundrums is increasingly wearing thin. Meanwhile, politics is reduced to merely one variable among others. This economic framework (which scholars, intellectuals, and ordinary commentators are drawn to) explains less and less of the world we inhabit. If anything, it now obscures more than it reveals. Given the transformations in political life, both nationally and globally, the time has come to invert this hierarchy that treats the economic logic as foundational and politics as subordinate. The argument to bring primacy back to the political is not a rhetorical flourish but an analytical correction.

And it must begin with a basic proposition that contemporary commentaries have worked hard to forget: societies are not held together by markets alone. They are ordered by decisions about authority, legitimacy, obligation, power, and the use of force. These decisions, at one level, precede the economic exchange, while at another level, they make it intelligible.

In such a sense, these verdicts are political well before they are economic. Markets themselves do not emerge organically. Instead, markets are authorised, regulated, protected, and, when required, overridden through political forces. To treat politics as derivative is, therefore, not material realism but conceptual abdication. Acknowledging this does not deny material constraints but clarifies the conditions under which material life acquires stability and meaning.

In classical political thought, this reality was understood without hesitation. Politics was not a residual category but the highest form of collective judgement. The polis was the site where communities reasoned about the common good, resolved conflicts, and established hierarchies of obligation. Yet modern political theory, especially under the long shadow of Marx and later reinforced by various technocratic traditions, had reversed this understanding. Politics has been reduced to superstructure, agency has been limited to historical necessity, and power has been narrowed to a function of material relations.

But such reductionism has not aged well. Claims about society, politics, and the economy cannot be sustained in isolation from one another, nor can economics alone be treated as the organising core of political life. This interdependence does not negate priority but only obscures it. Similarly, power is not merely reflective of economic structure. Instead, it has become an organising principle in its own right, one that responds to economic incentives and repeatedly reshapes them.

For some time now, economy-based explanations are struggling to account for several relevant questions, such as “why similar economic conditions generate radically different political outcomes”, “why ideology mobilises beyond class binaries”, or “why states routinely act against short-term economic interest in pursuit of security, prestige, or strategic autonomy”. There is clear evidence of inadequacy, if not deviations, of this economic-based model.

This becomes even clearer once we move beyond a narrow, relational view of power and take structural power seriously. Susan Strange offers a useful vocabulary here by identifying four interlinked structures: security, production, finance, and knowledge. And through these four structures, she argues how power gets exercised. These are not neutral domains governed by technical logic but constitute political arenas that determine “who sets the rules”, “who bears the costs”, and more importantly, “who enjoys the benefits”.

Security structures become vital because they determine which threats are recognised and which forms of violence are legitimised. Production structures shape dependency as much as output, determining where value is created and where vulnerability accumulates. Financial structures govern access to credit, liquidity, and monetary stability, disciplining states without overt coercion. Similarly, the knowledge structures, often the most underestimated, are vital in defining expertise, normalising policy options, and setting the limits of the thinkable.

When looked closely, what unites these structures is not economics but political authority. It is the capacity to configure outcomes before choices are even made. And this way, power can no longer be viewed as a command. Instead, it functions as architecture, shaping the arena itself.

Seen from this perspective, recent disruptions in the international order appear far less anomalous than many contemporary commentators suggest. For instance, the Trump presidency (especially, the second term), often dismissed as economic nationalism or institutional vandalism, is in fact making explicit what liberal globalisation had long concealed: that economic arrangements survive only as long as political authority sustains them. We can see similar dynamics at play with other major powers, whether in the industrial policies of many European countries or in China’s policy vis-à-vis tech and the export of critical minerals. In all of these instances, trade has become subordinated to security, and engagement is being driven mainly by sovereignty.

What an economy-based explanation fails to acknowledge here is that the economy is not directing the state. Rather, it is the state that is driving the economy. This was neither a collapse of capitalism nor a rejection of markets, but a reassertion of political leadership and power hierarchies. Sanctions, tariffs, supply-chain reconfiguration, and industrial policy should not be viewed as policy failures because they were political decisions reflecting altered priorities. What essentially changed was not the presence of power, but its visibility.

Such a realisation must lead us to confront and reconsider Marx and his ideas. Marx’s insistence on material life still explains a lot about history and politics, but his treatment of politics has always been overstretched. Politics does not arrive after economics. In fact, it structures the conditions under which economic relations acquire stability and meaning. Class struggle itself presupposes political frameworks that define law, coercion, identity, and membership. Without political authority or consensus, we see economic categories remaining analytically thin and socially indeterminate.

The long dominance of economic-based explanations also had another (though rarely acknowledged) consequence: it narrowed the vocabulary of political thinking. When politics is treated primarily as administrative control, concepts like authority, order, sovereignty, and obligation are viewed with suspicion or dismissed altogether. This is not intellectual neutrality, but it falls under the category of theoretical foreclosure.

What is often described as ideological imbalance, particularly in India, is essentially a deeper conceptual imbalance with notable consequences. For decades, economic reform was framed as a technocratic inevitability rather than a political choice. At the same time, questions of authority, sovereignty, and national cohesion were treated as distractions or even threats.

The shifts in governance over the last decade have unsettled this arrangement, not by rejecting markets or growth, but by reasserting the state’s role in setting priorities. Welfare delivery, infrastructure expansion, strategic autonomy, and economic nationalism have been pursued not as isolated policy silos, but as expressions of political judgment about national interest. This has unsettled those accustomed to viewing the state merely as an administrator of economic logic rather than its driver.

Reasserting the primacy of the political does not replace one determinism with another. Politics is not destiny any more than economics is. But politics is prior. It establishes the parameters within which economic life unfolds. It defines the boundaries of markets, the legitimacy of institutions, and the meaning of collective interest. Recognising this is not ideological provocation but analytical clarity.

In an era in which power is once again openly shaping markets, borders, and knowledge regimes, treating politics as secondary is no longer tenable. Revising Marx is an act of realism, one that brings political theory, political thought, and political understanding closer to reality.

Political judgment remains the decisive force in human affairs. Any serious political commentary that refuses to begin from this premise increasingly risks explaining a world that no longer exists.

• Prof Santishree Dhulipudi Pandit is the Vice Chancellor of JNU.