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, 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”. Governments control some aspects of a mixed economy but, since the end of the 18th century, there has been a gradual trend towards enabling markets to function more freely.
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 (18.104.22.168).
- Governments make economic transactions, collecting money in the form of taxes and spending it (22.214.171.124).
- People’s moral values affect their economic behaviour and government economic policies (126.96.36.199).
- 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 (188.8.131.52).
© PatternsofPower.org, 2014
 The definitions of ‘market economies’, ‘command economies’ and ‘mixed economies’, and the associated quotations are taken from Economics.1.2 by Samuelson and Nordhaus, pages 6-7.