The Political Economy of the Dynamic Nature of Government Intervention: An Introduction to Potentials and Problems

ABSTRACTEconomic actors command political power as well as economic power. It is used to the same effect to create monopolies and oligopolies. The two powers can be combined; e.g., aside from monopolies based only on economic power or only on government intervention, there are especially powerful monopolies that command both powers. The stability of the various power holders is related to the nature of their power base; pure economic power is particularly unstable. However, economic power can be more readily amassed than interventionist power, which violates norms, and has a sharply declining marginal utility. When the effects of interventionist power are added to those of economic power, economies such as America, which are often classified as quite competitive, turn out to be much less so.

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The Economic Accommodation, I

The Culture of Contentment ◽

10.23943/princeton/9780691171654.003.0007 ◽

2017 ◽

Author(s):

John Kenneth Galbraith

Keyword(s):

Political Economy ◽

Monetary Policy ◽

Fiscal Policy ◽

Government Intervention ◽

The Political ◽

Public Action ◽

Economic Process ◽

Laissez Faire

This chapter examines the ability of economics to accommodate its view of economic process, instruction and recommended public action to contentment. It begins with a discussion of the broad commitment to the doctrine of laissez faire as economic accommodation, arguing that it is general but not a confining force in the culture of contentment. It then considers how the most serious general threat to contentment arises from the intrinsic tendency of capitalism to instability—to recession or depression. It also explores three lines of government intervention in economics: fiscal policy, monetary policy, and direct restraint on costs. The chapter distinguishes between monetary policy and monetarism, the latter of which used to have a prominent role in the political economy of contentment.

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Capitalism and Socialism: A Review of Kornai's Dynamism, Rivalry, and the Surplus Economy

Journal of Economic Literature ◽

10.1257/jel.20151282 ◽

2017 ◽

Vol 55 (1) ◽

pp. 191-208 ◽

Cited By ~ 3

Author(s):

Chenggang Xu

Keyword(s):

Political Economy ◽

Financial Crisis ◽

Global Financial Crisis ◽

Mirror Image ◽

Eastern Bloc ◽

The Political ◽

Central Theme ◽

Dynamic Nature ◽

New Frontier ◽

The Global Financial Crisis

Understanding the nature of capitalism has been a central theme of economics. The collapse of the Eastern Bloc and the global financial crisis spurred the reemergence of the political economy as a new frontier and the revival of interest in the nature of capitalism. János Kornai's book Dynamism, Rivalry, and the Surplus Economy: Two Essays on the Nature of Capitalism fills an important intellectual gap in understanding the dynamic nature of capitalism by comparing it with its mirror image, socialism. To further develop the themes contained in the book, serious challenges are posed theoretically and empirically, as well as in subjects, such as hybrid capitalism. (JEL L32, P12, P14, P16, P26, P31)

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