3.1.4 Classification of Economic Power
Previous sections have defined the purpose of economic governance, its relationship to other dimensions of power, and the components of an economic system. The next three segments of this chapter provide an interpretation of this book’s use of common economic terminology; they also act as reference material:
(3.2) The components of an economic system, as illustrated in the previous section, are examined individually. The effects of different types of tax and different ways of training labour are examples of changing the power and impact of individual economic elements. Government spend, consumer spend and the financial system all have multiple forms of interaction with the rest of the economy. Wealth creation and its supply-chains are multi-level.
(3.3) The actors in an economic system interact with each other in a series of negotiations or ‘markets’. Supply and demand govern the power relationships between workers, manufacturing companies, service-providers and the finance industry – but government affects each of these markets through regulation, macroeconomic management and some direct action.
(3.4) Economic activity takes place at every level of subsidiarity – from an individual, through companies and countries, to the global economic system. It is partly conditioned by geography. Globalisation has eroded the significance of national boundaries, with industries and people moving around the world.
(3.5) People’s lives are deeply affected by economics and many economic issues are therefore contentious. Some of the main points of contention are examined: including paying tax, government spend, free trade, regulating the finance industry, sharing wealth, the environment and relationships with developing countries. The chapter concludes with a summary of the legitimacy of economic governance, noting the dominance of neoliberalism.
At this point, readers who are just seeking an overview of this book’s contents may wish to move to the next chapter (4). Alternatively, they may wish to go directly to a particular segment by following the above links or continue to read sequentially.