The Economics of Politics
Mitch Robertson Co
Entrepreneur—Writer—Speaker Uncensored Growth, Unfiltered Thoughts.
Politics and economics are amazingly interconnected, constantly interacting to shape the global business environment. As entrepreneurs, we often focus on market trends, technological innovations, and consumer behavior, but we overlook the monumental impact politics has on economic conditions. Not paying attention to the policies and politics globally will not only leave you misinformed, it can put the future of your business at risk. Here’s why understanding the economics of politics is critical to building a successful business today.
Global Political Shifts Shape Economic Realities
In recent years, politics has exerted unprecedented influence on global markets. Whether it’s trade wars, regulatory changes, or geopolitical tensions, political decisions directly affect supply chains, labor markets, and financial systems. As entrepreneurs, staying oblivious to these shifts is akin to navigating without a map. But even more dangerous is getting distracted by the political noise that parties want you to focus on—topics that stir emotions, spark outrage, and dominate news cycles.
It’s all too easy to get caught up in the headline-grabbing debates, but here’s the harsh truth: while hot-button issues are often front and center, the real action happens behind the scenes. Trade agreements, tax reforms, labor laws, and environmental regulations—these are the building blocks of economic power. While politicians argue over divisive social issues, the policies that define global economics are quietly passed in the background, often unnoticed by the public. These decisions impact everything from interest rates and access to capital to the ease of hiring talent or expanding internationally.
And let’s not forget the human toll. Political decisions don’t just affect markets—they impact lives. From careers that falter due to regulatory changes, to individuals who lose jobs or opportunities because of protectionist policies, or even lives lost in geopolitical conflicts—politics has a real, often devastating effect on the people within these economies. When policies shift, businesses aren’t the only ones to suffer; individuals in affected markets bear the brunt of uncertainty, instability, and the resulting economic fallout.
Trade Wars & Protectionism: Take the US-China trade war, for example. Tariffs introduced by both countries disrupted global supply chains, increased manufacturing costs, and led businesses to reevaluate sourcing strategies. This wasn't just a problem for big corporations; startups reliant on global suppliers felt the squeeze too. The economic consequences were real—everything from raw materials to tech components became more expensive and harder to source. And the ripple effect of these disruptions meant layoffs, factory closures, and lost livelihoods for individuals caught in the crossfire.
Regulatory Shifts: Political climates also dictate regulatory frameworks, from data protection laws like the GDPR in Europe to environmental regulations in the US. These policies can either create barriers or open doors. Understanding the political landscape of your target markets allows you to preemptively adjust business models. Case in point: companies operating in green tech industries are seeing a surge in opportunities as governments enforce sustainability mandates.
Inflation, Interest Rates, and the Political Machine
Inflation is a hot topic these days, driven largely by political responses to crises like the COVID-19 pandemic and the ongoing Russia-Ukraine war. Governments worldwide have implemented massive stimulus packages, driving inflation to levels not seen in decades. Central banks, in response, have hiked interest rates, directly affecting borrowing costs for businesses and consumers alike. Case in point: A startup launched by a fellow entrepreneur of mine based in Russia, www.waste-to-en.com, had to move operations to Dubai, setting him back months due to this conflict.
For entrepreneurs, rising interest rates can be a double-edged sword. On one hand, it becomes more expensive to access capital; on the other, this creates opportunities for businesses with cash reserves or innovative financing strategies. However, the challenge is real—navigating a high-interest environment requires more than a great product; it demands financial prudence and political awareness.
The Role of Populism and Economic Nationalism
Populism is on the rise globally, fueling economic nationalism and anti-globalization sentiments. While some see this as a barrier, others recognize the opportunities it presents. For instance, local-first movements have given rise to small businesses that champion domestic products over imports. Entrepreneurs who understand these political currents can position their brands as champions of localism, appealing to consumers seeking homegrown alternatives.
But there's a caveat: populist politics can also close doors. The rise of protectionism may limit access to international markets and increase trade barriers, which can be particularly challenging for startups looking to scale globally. Meanwhile, individuals in these markets face shrinking job opportunities, disrupted industries, and a higher cost of living as economic nationalism takes hold.
Political Stability and Entrepreneurial Confidence
Investors hate uncertainty, and political instability is a major driver of market volatility. Political crises—whether a government collapse, civil unrest, or contentious elections—create economic ripples that disrupt capital flows, consumer spending, and investor confidence. Entrepreneurs must stay agile, adjusting their strategies to weather these political storms.
Think of Brexit. For years, businesses in the UK and across Europe faced uncertainty as negotiations dragged on. Many startups struggled to secure funding, unsure of what the future held for trade and labor agreements. Those who succeeded in this turbulent period were the ones who pivoted quickly—either diversifying their markets or leaning into opportunities that emerged from the chaos.
Political Risk Isn’t Just for Big Business
One of the biggest mistakes startups can make is assuming that political risk only applies to global corporations. In reality, local elections, policy changes, and even regional conflicts can impact everything from hiring practices to supply chain logistics. Entrepreneurs who stay informed about political shifts, both local and global, are better positioned to mitigate risks and capitalize on opportunities.
Metrics that Matter
Final Thoughts
Don’t Get Distracted by the Noise: Policies Over Politics
It’s all too easy to get distracted by the noise of hot-button issues that political parties want you to focus on—topics that stir emotions, spark outrage, and dominate news cycles. But the reality is those headline-grabbing debates often have little to do with the policies that shape the economy. As entrepreneurs, it's critical to cut through the political theater and focus on the decisions that impact your business.
The real action lies in the policy frameworks that go unnoticed by the average voter. Trade agreements, tax reforms, labor laws, environmental regulations—these are the building blocks of economic power. While politicians argue over issues designed to rally their base, the policies that define global economics are quietly passed in the background. These are the moves that affect interest rates, access to capital, and the ease with which you can expand internationally or hire the right talent.
Understanding political trends allows you to anticipate changes, navigate challenges, and seize opportunities. Whether it's adjusting your supply chain, capitalizing on localism, or preparing for regulatory shifts, being politically informed isn't just a luxury—it's a necessity for long-term success.
Takeaway: Don’t be passive in the face of political change. Use it as a tool to sharpen your strategy, align your business with emerging trends, and build resilience in uncertain times. The entrepreneurs who thrive in this climate will be those who aren’t afraid to get political.
Uncensored Growth, Unfiltered Thoughts,