Politics and markets : world's political economic systems

Asise from the difference be tween despotic and libertarian governments, the greatest distinction between one government and another is in the degree to which market replaces government or government replaces market. Both Adam Smith and Karl Marx knew this. Hence, certain questions about the govern mental-market relation are at the core of both political science and economics, no less for planned systems than for market systems.

Both political science and economics have been to degree impover ished by pressing the study of these questions on each other, consequently leaving the questions to fall between two stools. Thus, when political science turns to institutions like legislatures, civil service, parties, and interest groups, it has been left with secondary questions. The operation of parliaments and legislative bodies, bureaucracies, parties, and interest groups depends in large part on the degree to which government replaces market or market replaces government. In political science also, even ambitious attempts to refine democratic theory are marred by inattention to the functions of government or the state, functions that differ depend ing on the role of the market in political-economic life.

These, then, are the issues of this book: the fundamental questions about government and politics, about market systems, and about the relations between the two. The issues are pursued in an explicit progression from simplicity to complexity. We begin with elements of social systems the understanding of which subsequently permits a grasp of complex systems in which the elements are combined in varied ways. The ver simplest elements are exchange, authority, and persuasion.