Monitoring the State or the Market: From Laissez Faire to Market Fundamentalism

Economic analysis should avoid distributional consequences, but in democratic countries, political power reflects wealth and income. Monitoring the State or the Market argues that absolute income equality is not consistent with a market economy, but large inequality is not. This study provides a survey of major social and economic developments over the past two centuries, showing that it is possible to have low Gini coefficients while preserving economic freedom and prosperity.

Format: Hardback
Length: 200 pages
Publication date: 21 December 2023
Publisher: Cambridge University Press

Economists argue that economic analysis should avoid the distributional consequences of policies. In democratic countries, however, the political power of individuals inevitably reflects their wealth and income. You cannot have a democracy when income and wealth distributions are greatly uneven. Monitoring the State or the Market explains that absolute income equality is not consistent with a market economy, yet neither is large inequality. This study provides a broad survey of major social and economic developments over the past two centuries, beginning with the Industrial Revolution and laissez faire and ending with neoliberalism and market fundamentalism. It explains how each of these periods initially brought moderation and accompanying benefits, showing that some countries, such as those in Scandinavia, have demonstrated that it is possible to have low Gini coefficients (low inequality), while preserving economic freedom and prosperity.

Economists argue that economic analysis should avoid the distributional consequences of policies.

In democratic countries, however, the political power of individuals inevitably reflects their wealth and income. You cannot have a democracy when income and wealth distributions are greatly uneven. Monitoring the State or the Market explains that absolute income equality is not consistent with a market economy, yet neither is large inequality. This study provides a broad survey of major social and economic developments over the past two centuries, beginning with the Industrial Revolution and laissez faire and ending with neoliberalism and market fundamentalism. It explains how each of these periods initially brought moderation and accompanying benefits, showing that some countries, such as those in Scandinavia, have demonstrated that it is possible to have low Gini coefficients (low inequality), while preserving economic freedom and prosperity.

ISBN-13: 9781009434447