One of the topics I was really interested in while doing my masters in economics was the impact of institutions on economic development. I looked at it from a few perspectives including the legal system, the existence of various policies or reforms and also studied the economic history of the US to see how the interactions between business and the orthodoxy of the day when it comes to big or small government.
There is no doubt the world operates on a lot of different systems and not one is right or wrong. There are systems better for deriving some outcomes rather than others but it is hard to say if a system is better overall. To begin, we have to agree on the principles; whose welfare to improve more of and what are the priority areas before others.
The market system which has been peddled around is not exactly the complete system. A market directs itself towards outcomes of those in power within the market. The politics and regulation are institutions above the market so they have a huge role in directing the market. While the government cannot be fully culpable of the outcomes of a market, they can help to coordinate the overall goal of the entire market: whether energies are directed towards production or gains diversion, whether one is working for one’s survival or some higher values.
History have proven itself that keeping people fed and with basic needs satisfied unlocks incredible boost to productivity and economic development. We need to enable more of that in all of our systems.
You must be logged in to post a comment.