This analysis yields a welfare taxonomy for alternative forms of democratic capitalism and more specifically a characterization of the blends of collective gain and distributional equity that can be achieved in the four systems. Freeman compares the benefits of the two economic and two political systems separately, and then analyzes the workings of four basic political economies. Freeman considers whether a mixed ownership structure is preferable to a private ownership structure and whether a pluralist type of democratic politics is preferable to a corporatist type. Examining in detail the experiences of several democratic European countries, John R. On the basis of an analysis of social welfare in varying types of market systems and in certain democratic political systems, Democracy and Markets illuminates alternative directions for institutional reform.
Markets and Majorities is must reading for anyone who has ever wondered why government just can't seem to get things done, as well as anyone who has asked why it should try in the first place.Įvents of the 1970s and 1980s have provoked intense controversy about the desirability of existing political and economic institutions.
However, he shows that all is not lost, citing, among other examples, political intervention in the medical industry as the only hope of stopping hospitals from competitive purchases of useless technology. By examining both sides of each policy area, Sheffrin's careful review of our national policy-making reveals a minefield where, in many cases, politics cannot help but fail as badly as markets. In short, the fact that markets may fail does not guarantee that politics will succeed. He argues that beneath each area lies a unique calculus of market failure and political pressures, and convincingly demonstrates that no single policy can be understood out of economic and political context. Sheffrin applies such analysis to the areas of health care, social security, environmental policy, product liability, trade policy, and fiscal and budgetary policy. He then combines the crucial question of political viability with the fascinating particulars of policy histories. Why should we trust the government to clean our air? How do we know what to define as clean? What kind of health insurance business will the government run? What are the dangers of publicly financed doctors? Sheffrin first explains traditional theories of market failure, used to justify intervention. In Markets and Majorities, Steven Sheffrin addresses essential yet overlooked questions about political intervention in economic spheres. Unfortunately, we do so blindly few Americans understand how or why our government regulates the market mechanisms that surround us. From the air we breathe, to our health, wealth, and security, Americans wade through a vast political ocean. America's government intervenes in almost every aspect of its citizens' daily lives.
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