3.1.2 Economic Power in Context

Societies vary in the extent to which government decision-makers – who are referred to in this book as ‘politicians’ – play a role in the management of their economies.  As described by Samuleson and Nordhaus in their book Economics, at one extreme, in a ‘market economy’, “individuals and private firms make the major decisions about production and consumption”; at the other extreme, in a ‘command economy’, “the government makes all decisions about production and distribution”; in practice “all societies are ‘mixed economies’, with elements of market and command”. [pp. 6-7]

A country’s Constitution determines the extent of legal oversight of the government’s powers (5.1.3), and its political system (6.1.2) determines how people are able to pressurise a government to pay heed to their moral concerns.

The government’s involvement in the economic system, and the roles of morality and the law, are broadly described in the following sub-sections to set the context for this chapter:

  • The government, using legal powers, sets the regulatory framework within which the components of an economy operate and interact with each other (3.1.2.1).
  • Governments make economic transactions, collecting money in the form of taxes and spending it (3.1.2.2).
  • People’s moral values affect their economic behaviour and government economic policies (3.1.2.3).
  • Some examples are given of how some multi-dimensional topics are treated in this book, giving links to their separate economic, moral, legal and political treatment (3.1.2.4).

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This page is intended to form part of Edition 4 of the Patterns of Power series of books.  An archived copy of it is held at https://www.patternsofpower.org/edition03/312a.htm