Description

Rating: Not rated

Tags: Economic History, Lang:en

Summary

Economies fail in many ways and for a variety of reasons. The debt crisis in Europe is one type of failure, as are the recurrent recessions that most countries experience from time to time. Strikes, lockouts and other types of industrial conflicts are obvious signs of failure, as are the many examples of environmental degradation from costly oil spills to global warming from the total destruction of whole fisheries to the increase in the number of endangered species. But often the failure is more insidious and less obvious as is the case with the growth of child poverty and the increasing number of families living below the poverty line. What this book argues is that the cause of each of these, and many other, economic failures, is systemic in nature. These are not separate and isolated short-comings but are instead the result of unbalanced economies. In some cases, as with the Soviet Union, this imbalance becomes so severe that the whole economic structure collapses. Why Economies Fail looks at the various different types of economies that have existed from time immemorial and concludes that there are, in fact, only four different ways that any economy can be structured. These four types are: co-operation, command, custom and competition – what are referred to as the Four Cs. Each type is examined in a survey of historical development starting with early foraging societies (co-operation) and continuing with ancient slave economies such as Sparta and the Roman Empire (command), medieval feudal societies (custom) up to modern market economies (competition). It explains how each was structured and how each was inevitably doomed to fail. The cause of failure in all cases was the over-dependence on just one of these structures. The survey also looks at modern economies such as communism, fascism and Islamic Republics, as well as market economies and suggests that the failures of each are the result of extremism. The final chapter explains why a mixed economy which encompasses elements of each of the Four Cs is likely to be the most successful. It looks at those elements necessary to produce “the right mix” and concludes with a surprising league table of today’s nations which shows those that have been successful in finding the right blend, and those which have failed abysmally. The position of the US and Canada in this table might surprise many people. The authors have many years of experience teaching and researching economics and are the successful authors of The Principles of Microeconomics, The Principles of Macroeconomics (both into their 7th editions), and The Worlds of Economics. Why Economies Fail however is far from being a dry economics textbook. It is a lively and intriguing look at the present and past structures of economies and encompasses ideas from many other disciplines including anthropology, history, social psychology, sociology and political theory.

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