That Doesn't Work Anymore by Robert S. Kricheff

Author:Robert S. Kricheff
Language: eng
Format: epub
Publisher: De|G Press
Published: 2019-02-26T16:00:00+00:00

There are different views of what the government’s role in the economy should be. They tend to vary around three major questions:

How much should government control the economy?

What methods should the government use to influence the economy?

Can these policies work within the political system and maintain support from the citizens?

Politics and economic policies are intertwined and increasingly economic ideologies are being mixed. No one system is right for every economy. It can depend on the size, diversity, institutions, and stages of economic development. Certain systems may be better for one country than another and countries may shift between systems over time.

New blueprints for economic systems are always evolving. Both China and India have shifted more toward market-based systems over the past decades and it has coincided with much greater economic growth, however, these have been evolutions not revolutions and each have evolved their own styles. You can see dramatic changes in China over the last few decades. While not a democracy by Western standards, China has shifted their economic structure and growth has accelerated as market forces have been introduced into their system, which had previously been very centralized. Manufacturing has been a major feature of this expansion. You could argue that manufacturing and infrastructure are more easily run in a somewhat centralized system like China’s, but a transition to a more consumer-based system may be more difficult in such a structure. Meanwhile, India is a democracy, and a very different country culturally than China. India for many years had a government steeped in social democracy, protectionism, public ownership of key asset, and heavy regulation. It has rapidly shifted toward a market economy beginning in the early 1990s. Its economy has grown exceptionally fast, but unlike China its growth has been heavily driven by service industries. While markets are pretty free much of the government interference is still in the form of bureaucracy.

Below is a list of some systems of political economy. It is brief and incomplete. It also mixes some ideas from economics with the world of politics. The goal is to give a flavor of the varied approaches to “political economy.”

–Capitalism is characterized by private property, competition, and noncentralized market mechanisms to determine supply, demand, and prices. This typically is associated with a limited role of government.

–Socialism is most strongly characterized by the doctrine that ownership and control of property should be owned publicly. The view is that everything that is produced is part of the social fabric and everyone is entitled to a share in it. Pricing, supply, and demand are not set in free markets because it can lead to exploitation and only help the rich, centralized governments make most of these decisions (even though they may be made up of rich people that benefit from its decisions).

–Social democracy, while originally focused on a peaceful shift to a fully socialist society, has evolved into a system that generally allows for private ownership but in a very highly regulated environment with extensive limitations on business. As it

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