Social market economy
The social market economy called Rhine capitalism, is a socioeconomic model combining a free market capitalist economic system alongside social policies that establish both fair competition within the market and a welfare state. It is sometimes classified as a coordinated market economy; the social market economy was promoted and implemented in West Germany by the Christian Democratic Union under Chancellor Konrad Adenauer in 1949. Its origins can be traced to the interwar Freiburg school of economic thought; the social market economy was designed to be a third way between laissez-faire economic liberalism and socialist economics. It was inspired by ordoliberalism, social democratic ideas and the political ideology of Christian democracy, or more the tradition of Christian ethics; the social market economy refrains from attempts to plan and guide production, the workforce, or sales, but it does support planned efforts to influence the economy through the organic means of a comprehensive economic policy coupled with flexible adaptation to market studies.
Combining monetary, trade, customs and social policies as well as other measures, this type of economic policy aims to create an economy that serves the welfare and needs of the entire population, thereby fulfilling its ultimate goal. The "social" segment is wrongly confused with socialism and democratic socialism and although aspects were inspired by the latter the social market approach rejects the socialist ideas of replacing private property and markets with social ownership and economic planning; the "social" element to the model instead refers to support for the provision of equal opportunity and protection of those unable to enter the free market labor force because of old-age, disability, or unemployment. Some authors use the term "social capitalism" with the same meaning as social market economy, it is called "Rhine capitalism" when contrasting it with the Anglo-Saxon model of capitalism. Rather than see it as an antithesis, some authors describe Rhine capitalism as a successful synthesis of the Anglo-American model with social democracy.
The German model is contrasted and compared with other economic models, some of which are described as "third ways" or regional forms of capitalism, including Tony Blair's Third Way, French dirigisme, the Dutch polder model, the Nordic model, Japanese corporate capitalism and the contemporary Chinese model. A 2012 comparative politics textbook distinguishes between the "conservative-corporatist welfare state" and the "labor-led social democratic welfare state"; the concept of the model has since been expanded upon into the idea of an eco-social market economy as not only taking into account the social responsibility of humanity, but the sustainable use and protection of natural resources. Social market economies aims to combine free initiative and social welfare on the basis of a competitive economy; the social market economy is opposed to laissez-faire policies and to socialist economic systems and combines private enterprise with regulation and state intervention to establish fair competition, maintaining a balance between a high rate of economic growth, low inflation, low levels of unemployment, good working conditions, social welfare and public services.
The term "social" was established by Adenauer to prevent further reference to Christian socialism, used in the early party agenda Ahlener Programm in 1947. Although the social market economy model evolved from ordoliberalism, this concept was not identical with the conception of the Freiburg School as it emphasized the state's responsibility to improve the market condition and to pursue a social balance. In contrast to Walter Eucken, who sought an answer to the social question by establishing a functioning competitive order within a constitutional framework, Alfred Müller-Armack conceived the social market economy as a regulatory policy idea aiming to combine free enterprise with a social programme, underpinned by market economic performance. In putting social policy on par with economic policy, Müller-Armack's concept was more emphatic regarding socio-political aims than the ordoliberal economic concept; this dual principle appeared in the name of the model. Although the adjective "social" attracted criticism as a decorative fig leaf or conversely as a gateway for antiliberal interventionism, it meant more than distinguishing the concept from that of laissez-faire capitalism on the one side and of ordoliberal conceptions on the other.
In drawing on Wilhelm Röpke's anthropo-sociological approach of an economic humanism leading to a Civitas Humana, Müller-Armack pursued a "Social Humanism" or "Social Irenics"—the notion "irenics" derives from the Greek word εἰρήνη, which means being conducive to or working toward peace, moderation or conciliation—to overcome existing differences in society. Therefore, the social market economy as an extension of neoliberal thought was not a defined economic order, but a holistic conception pursuing a complete humanistic societal order as a synthesis of conflicting objectives, namely economic freedom and social security; this socio-economic imperative managed by a strong state—in contrast to the ordoliberal minimal state safeguarding the economic order—is labelled by the ambiguous but historical term Der Dritte Weg. The concept of the social market economy received fundamental impulses from reflection and critique of historical economic and social orders, namely Smithian laissez-faire liberalism on the one hand and Marxian socialism on the other.
Furthermore, various Third Way conceptions prepared the g
Syndicalism is a radical current in the labor movement and was most active in the early 20th century. According to the Marxist historian Eric Hobsbawm, it predominated the revolutionary left in the decade preceding World War I as Marxism was reformist at that time. Major syndicalist organizations included the General Confederation of Labor in France, the National Confederation of Labor in Spain, the Italian Syndicalist Union, the Free Workers' Union of Germany, the Argentine Regional Workers' Federation; the Industrial Workers of the World, the Irish Transport and General Workers' Union and the Canadian One Big Union, though they did not regard themselves as syndicalists, are considered by most historians to belong to this current. A number of syndicalist organizations were and still are to this day linked in the International Workers' Association; the term syndicalism has French origins. In French, a syndicat is a trade union a local union; the corresponding words in Spanish and Portuguese and Italian, are similar.
By extension, the French syndicalisme refers to trade unionism in general. The concept syndicalisme révolutionnaire or revolutionary syndicalism emerged in French socialist journals in 1903 and the French General Confederation of Labor came to use the term to describe its brand of unionism. Revolutionary syndicalism, or more syndicalism with the revolutionary implied, was adapted to a number of languages by unionists following the French model. Many scholars, including Ralph Darlington, Marcel van der Linden, Wayne Thorpe, apply the term syndicalism to a number of organizations or currents within the labor movement that did not identify as syndicalist, they apply the label to one big unionists or industrial unionists in North America and Australia, Larkinists in Ireland, groups that identify as revolutionary industrialists, revolutionary unionists, anarcho-syndicalists, or councilists. This includes the Industrial Workers of the World in the United States, for example, which claimed its industrial unionism was "a higher type of revolutionary labor organization than that proposed by the syndicalists".
Van der Linden and Thorpe use syndicalism to refer to "all revolutionary, direct-actionist organizatons". Darlington proposes that syndicalism be defined as "revolutionary trade unionism", he and van der Linden argue that it is justified to group together such a wide range of organizations because their similar modes of action or practice outweigh their ideological differences. Others, like Erik Olssen, disagree with this broad definition. According to Olssen, this understanding has a "tendency to blur the distinctions between industrial unionism and revolutionary socialism". Peterson gives a more restrictive definition of syndicalism based on five criteria: A preference for federalism over centralism. Opposition to political parties. Seeing the general strike as the supreme revolutionary weapon. Favoring the replacement of the state by "a federal, economic organization of society". Seeing unions as the basic building blocks of a post-capitalist society; this definition excludes the Canadian One Big Union.
Peterson proposes the broader category revolutionary industrial unionism to encompass syndicalism, groups like the IWW and the OBU, others. The defining commonality between these groups is that they sought to unite all workers in a general organization. Syndicalism spread from there; the French CGT was the inspiration for syndicalist groups throughout Europe and the world. Revolutionary industrial unionism, part of syndicalism in the broader sense, originated with the IWW in the United States and caught on in other countries. In a number of countries, certain syndicalist practices and ideas predate the coining of the term in France or the founding of the IWW. In Bert Altena's view, a number of movements in Europe can be called syndicalist before 1900. According to the English social historian E. P. Thompson and the anarcho-syndicalist theorist Rudolf Rocker, there were syndicalist tendencies in Britain's labor movement as early as the 1830s. Syndicalists saw themselves as the heirs of the First International, the international socialist organization formed in 1864 its anti-authoritarian wing led by Mikhail Bakunin.
Bakunin and his followers advocated the general strike, rejected electoral politics, anticipated workers' organizations replacing rule by the state. According to Lucien van der Walt, the Spanish section of the First International, formed in 1870, was in fact syndicalist. Kenyon Zimmer sees a "proto-syndicalism" in the influence the anarchist-led International Working People's Association and Central Labor Union, which originated in the American section of the First International, had in the Chicago labor movement of the 1880s, they were involved in the nationwide struggle for an eight-hour day. On May 3, 1886, the police killed three striking workers at a demonstration in Chicago. Seven policemen and four workers were killed the following day when someone an IWPA member, threw a bomb at the police. Four anarchists were executed for conspiring with the man who threw the bomb; the Haymarket Affair, as these events become known, led anarchists and labor organizers, including syndicalists, in both the United States and Europe to re-evaluate the revolutionary meaning of the general strike.
According to Émile Pouget, a French anarchist and CGT leader, from "the United States, the idea of the general strike – fertilized by the blood of anarchists hanged in Chicago – was imported to France". In the 1890s, French anarchists, conceding that individual action such as assassinations had failed, turned
A gift economy, gift culture, or gift exchange is a mode of exchange where valuables are not traded or sold, but rather given without an explicit agreement for immediate or future rewards. This exchange contrasts with a barter economy or a market economy, where goods and services are exchanged for value received. Social norms and custom govern gift exchange. Gifts are not given in an explicit exchange of goods or services for some other commodity; the nature of gift economies forms the subject of a foundational debate in anthropology. Anthropological research into gift economies began with Bronisław Malinowski's description of the Kula ring in the Trobriand Islands during World War I; the Kula trade appeared to be gift-like since Trobrianders would travel great distances over dangerous seas to give what were considered valuable objects without any guarantee of a return. Malinowski's debate with the French anthropologist Marcel Mauss established the complexity of "gift exchange" and introduced a series of technical terms such as reciprocity, inalienable possessions, presentation to distinguish between the different forms of exchange.
According to anthropologists Maurice Bloch and Jonathan Parry, it is the unsettled relationship between market and non-market exchange that attracts the most attention. Gift economies are said, by some, to build communities, with the market serving as an acid on those relationships. Gift exchange is distinguished from other forms of exchange by a number of principles, such as the form of property rights governing the articles exchanged. Gift ideology in commercialized societies differs from the "prestations" typical of non-market societies. Gift economies must be differentiated from several related phenomena, such as common property regimes and the exchange of non-commodified labour. According to anthropologist Jonathan Parry, discussion on the nature of gifts, of a separate sphere of gift exchange that would constitute an economic system, has been plagued by the ethnocentric use of modern, market society-based conception of the gift applied as if it were a cross-cultural, pan-historical universal.
However, he claims that anthropologists, through analysis of a variety of cultural and historical forms of exchange, have established that no universal practice exists. His classic summation of the gift exchange debate highlighted that ideologies of the "pure gift" "are most to arise in differentiated societies with an advanced division of labour and a significant commercial sector" and need to be distinguished from non-market "prestations". According to Weiner, to speak of a "gift economy" in a non-market society is to ignore the distinctive features of their exchange relationships, as the early classic debate between Bronislaw Malinowski and Marcel Mauss demonstrated. Gift exchange is "embedded" in political, kin, or religious institutions, therefore does not constitute an "economic" system per se. Gift-giving is a form of transfer of property rights over particular objects; the nature of those property rights varies from society to society, from culture to culture, are not universal. The nature of gift-giving is thus altered by the type of property regime in place.
Property is not a thing. According to Chris Hann, property is a social relationship that governs the conduct of people with respect to the use and disposition of things. Anthropologists analyze these relationships in terms of a variety of actors' "bundle of rights" over objects. An example is the current debates around intellectual property rights. Hann and Strangelove both give the example of a purchased book, over which the author retains a "copyright". Although the book is a commodity and sold, it has not been "alienated" from its creator who maintains a hold over it. Weiner has argued that the ability to give while retaining a right to the gift/commodity is a critical feature of the gifting cultures described by Malinowski and Mauss, explains, for example, why some gifts such as Kula valuables return to their original owners after an incredible journey around the Trobriand islands; the gifts given in Kula exchange still remain, in the property of the giver. In the example used above, "copyright" is one of those bundled rights that regulate the use and disposition of a book.
Gift-giving in many societies is complicated because "private property" owned by an individual may be quite limited in scope. Productive resources, such as land, may be held by members of a corporate group, but only some members of that group may have "use rights"; when many people hold rights over the same objects gifting has different implications than the gifting of private property. Anthropologist Annette Weiner refers to these types of objects as "inalienable possessions" and to the process as "keeping while giving". Malinowski's study of the Kula ring became the subject of debate with the French anthropologist, Marcel Mauss, author of "The Gift". In Parry's view, Malinowski placed the emphasis on the exchange of goods between individuals, their non-altruistic motives for giving the gift: they expected a return of equal or greater value. Malinowski stated.
Social credit is an interdisciplinary and distributive philosophy developed by C. H. Douglas, a British engineer who published a book by that name in 1924, it encompasses economics, political science and accounting. Its policies are designed, according to Douglas, to disperse economic and political power to individuals. Douglas wrote, "Systems were made for men, not men for systems, the interest of man, self-development, is above all systems, whether theological, political or economic." Douglas said that Social Crediters want to build a new civilization based upon "absolute economic security" for the individual, where "they shall sit every man under his vine and under his fig tree. In his words, "what we demand of existence is not that we shall be put into somebody else's Utopia, but we shall be put in a position to construct a Utopia of our own."It was while he was reorganising the work at Farnborough, during World War I, that Douglas noticed that the weekly total costs of goods produced was greater than the sums paid to individuals for wages and dividends.
This seemed to contradict the theory of classic Ricardian economics, that all costs are distributed as purchasing power. Troubled by the seeming difference between the way money flowed and the objectives of industry, Douglas decided to apply engineering methods to the economic system. Douglas collected data from more than a hundred large British businesses and found that in nearly every case, except that of companies becoming bankrupt, the sums paid out in salaries and dividends were always less than the total costs of goods and services produced each week: consumers did not have enough income to buy back what they had made, he published his observations and conclusions in an article in the magazine The English Review, where he suggested: "That we are living under a system of accountancy which renders the delivery of the nation's goods and services to itself a technical impossibility." He formalized this observation in his A+B theorem. Douglas proposed to eliminate this difference between total prices and total incomes by augmenting consumers' purchasing power through a National Dividend and a Compensated Price Mechanism.
According to Douglas, the true purpose of production is consumption, production must serve the genuine expressed interests of consumers. In order to accomplish this objective, he believed that each citizen should have a beneficial, not direct, inheritance in the communal capital conferred by complete access to consumer goods assured by the National Dividend and Compensated Price. Douglas thought that consumers provided with adequate purchasing power, will establish the policy of production through exercise of their monetary vote. In this view, the term economic democracy does not mean worker control of industry, but democratic control of credit. Removing the policy of production from banking institutions and industry, social credit envisages an "aristocracy of producers and accredited by a democracy of consumers."The policy proposals of social credit attracted widespread interest in the decades between the world wars of the twentieth century because of their relevance to economic conditions of the time.
Douglas called attention to the excess of production capacity over consumer purchasing power, an observation, made by John Maynard Keynes in his book, The General Theory of Employment and Money. While Douglas shared some of Keynes' criticisms of classical economics, his unique remedies were disputed and rejected by most economists and bankers of the time. Remnants of social credit still exist within social credit parties throughout the world, but not in the purest form advanced by Douglas. Douglas disagreed with classical economists who recognised only three factors of production: land and capital. While Douglas did not deny the role of these factors in production, he considered the “cultural inheritance of society” as the primary factor, he defined cultural inheritance as the knowledge and processes that have accrued to us incrementally from the origins of civilization. Mankind does not have to keep "reinventing the wheel". "We are the administrators of that cultural inheritance, to that extent the cultural inheritance is the property of all of us, without exception.
Adam Smith, David Ricardo and Karl Marx claimed. While Douglas did not deny that all costs relate to labour charges of some sort, he denied that the present labour of the world creates all wealth. Douglas distinguished between value and prices, he claimed that one of the factors resulting in a misdirection of thought in terms of the nature and function of money was economists' near-obsession about values and their relation to prices and incomes. While Douglas recognized "value in use" as a legitimate theory of values, he considered values as subjective and not capable of being measured in an objective manner, thus he rejected the idea of the role of money as a measure, of value. Douglas believed that money should act as a medium of communication by which consumers direct the distribution of production. Associated with the concept of cultural inheritance as a factor of production is the social credit theory of economic sabotage. While Douglas believed the cultural heritage factor of production is primary in increasing wealth, he believed that economic sabotage is the primary factor decreasing it.
The word wealth derives from the Old English word wela, or "well-being", Douglas believed that all production should increase personal wel
Feudalism was a combination of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries. Broadly defined, it was a way of structuring society around relationships derived from the holding of land in exchange for service or labour. Although derived from the Latin word feodum or feudum in use, the term feudalism and the system it describes were not conceived of as a formal political system by the people living in the Middle Ages. In its classic definition, by François-Louis Ganshof, feudalism describes a set of reciprocal legal and military obligations among the warrior nobility revolving around the three key concepts of lords and fiefs. A broader definition of feudalism, as described by Marc Bloch, includes not only the obligations of the warrior nobility but those of all three estates of the realm: the nobility, the clergy, the peasantry bound by manorialism. Since the publication of Elizabeth A. R. Brown's "The Tyranny of a Construct" and Susan Reynolds's Fiefs and Vassals, there has been ongoing inconclusive discussion among medieval historians as to whether feudalism is a useful construct for understanding medieval society.
There is no accepted modern definition of feudalism, at least among scholars. The adjective feudal was coined in the 17th century, the noun feudalism used in a political and propaganda context, was not coined until the 19th century, from the French féodalité, itself an 18th-century creation. In a classic definition by François-Louis Ganshof, feudalism describes a set of reciprocal legal and military obligations among the warrior nobility, revolving around the three key concepts of lords and fiefs, though Ganshof himself noted that his treatment related only to the "narrow, legal sense of the word". A broader definition, as described in Marc Bloch's Feudal Society, includes not only the obligations of the warrior nobility but those of all three estates of the realm: the nobility, the clergy, those living by their labour, most directly the peasantry bound by manorialism. Since the publication of Elizabeth A. R. Brown's "The Tyranny of a Construct" and Susan Reynolds's Fiefs and Vassals, there has been ongoing inconclusive discussion among medieval historians as to whether feudalism is a useful construct for understanding medieval society.
Outside a European context, the concept of feudalism is used only by analogy, most in discussions of feudal Japan under the shōguns, sometimes medieval and Gondarine Ethiopia. However, some have taken the feudalism analogy further, seeing feudalism in places as diverse as Spring and Autumn period in China, ancient Egypt, the Parthian empire, the Indian subcontinent and the Antebellum and Jim Crow American South; the term feudalism has been applied—often inappropriately or pejoratively—to non-Western societies where institutions and attitudes similar to those of medieval Europe are perceived to prevail. Some historians and political theorists believe that the term feudalism has been deprived of specific meaning by the many ways it has been used, leading them to reject it as a useful concept for understanding society; the term "féodal" was used in 17th-century French legal treatises and translated into English legal treatises as an adjective, such as "feodal government". In the 18th century, Adam Smith, seeking to describe economic systems coined the forms "feudal government" and "feudal system" in his book Wealth of Nations.
In the 19th century the adjective "feudal" evolved into a noun: "feudalism". The term feudalism is recent, first appearing in French in 1823, Italian in 1827, English in 1839, in German in the second half of the 19th century; the term "feudal" or "feodal" is derived from the medieval Latin word feodum. The etymology of feodum is complex with multiple theories, some suggesting a Germanic origin and others suggesting an Arabic origin. In medieval Latin European documents, a land grant in exchange for service was called a beneficium; the term feudum, or feodum, began to replace beneficium in the documents. The first attested instance of this is from 984, although more primitive forms were seen up to one-hundred years earlier; the origin of the feudum and why it replaced beneficium has not been well established, but there are multiple theories, described below. The most held theory was proposed by Johan Hendrik Caspar Kern in 1870, being supported by, amongst others, William Stubbs and Marc Bloch.
Kern derived the word from a putative Frankish term *fehu-ôd, in which *fehu means "cattle" and -ôd means "goods", implying "a moveable object of value." Bloch explains that by the beginning of the 10th century it was common to value land in monetary terms but to pay for it with moveable objects of equivalent value, such as arms, horses or food. This was known as feos, a term that took on the general meaning of paying for something in lieu of money; this meaning was applied to land itself, in which land was used to pay for fealty, such as to a vassal. Thus the old word feos meaning movable property changed little by little to feus meaning the exact opposite: landed property. Another theory was put forward by Archibald R. Lewis. Lewis said the origin of'fief' is not feudum, but rather foderum, the earliest attested use being in Astronomus's Vita Hludovici. In that text is a passage about Louis the Pious that says annona militaris quas vulgo foderum vocant, which can be translated as "Louis forbade that military provender (which they popular
Market socialism is a type of economic system involving the public, cooperative or social ownership of the means of production in the framework of a market economy. Market socialism differs from non-market socialism in that the market mechanism is utilized for the allocation of capital goods and the means of production. Depending on the specific model of market socialism, profits generated by owned firms may variously be used to directly remunerate employees, accrue to society at large as the source of public finance or be distributed amongst the population in a social dividend. Market socialism is distinguished from the concept of the mixed economy because unlike the mixed economy, models of market socialism are complete and self-regulating systems. Market socialism contrasts with social democratic policies implemented within capitalist market economies: while social democracy aims to achieve greater economic stability and equality through policy measures such as taxes and social welfare programs, market socialism aims to achieve similar goals through changing patterns of enterprise ownership and management.
Although economic proposals involving social ownership with factor markets have existed since the early 19th century, the term "market socialism" only emerged in the 1920s during the socialist calculation debate. Contemporary market socialism emerged from the debate on socialist calculation during the early-to-mid 20th century among socialist economists who believed that a socialist economy could neither function on the basis of calculation in natural units nor through solving a system of simultaneous equations for economic coordination, that capital markets would be required in a socialist economy. Early models of market socialism trace their roots to the work of Adam Smith and the theories of classical economics, which consisted of proposals for cooperative enterprises operating in a free-market economy; the aim of such proposals was to eliminate exploitation by allowing individuals to receive the full product of their labor while removing the market-distorting effects of concentrating ownership and wealth in the hands of a small class of private owners.
Among early advocates of market socialism were the Ricardian socialist economists and mutualist philosophers. In the early 20th century, Oskar Lange and Abba Lerner outlined a neoclassical model of socialism which included a role for a central planning board in setting prices equal to marginal cost to achieve Pareto efficiency. Though these early models did not rely on genuine markets, they were labeled "market socialist" for their utilization of financial prices and calculation. In more recent models proposed by American neoclassical economists, public ownership of the means of production is achieved through public ownership of equity and social control of investment; the key theoretical basis for market socialism is the negation of the underlying expropriation of surplus value present in other, modes of production. Socialist theories that favored the market date back to the Ricardian socialists and anarchist economists, who advocated a free-market combined with public ownership or mutual ownership of the means of production.
Proponents of early market socialism include the Ricardian socialist economists, the classical liberal philosopher John Stuart Mill and the anarchist philosopher Pierre-Joseph Proudhon. These models of socialism entailed "perfecting" or improving the market-mechanism and free-price system by removing distortions caused by exploitation, private property and alienated labor; this form of market socialism has been termed "free-market socialism" because it does not involve planners. Mill's early economic philosophy was one of free markets, he altered his views toward a more socialist bent, adding chapters to his Principles of Political Economy in defence of a socialist outlook, defending some socialist causes. Within this revised work he made the radical proposal that the whole wage system be abolished in favour of a co-operative wage system. Nonetheless, some of his views on the idea of flat taxation remained, albeit altered in the third edition of the Principles of Political Economy to reflect a concern for differentiating restrictions on "unearned" incomes, which he favoured, those on "earned" incomes, which he did not favour.
Mill's Principles, first published in 1848, was one of the most read of all books on economics in the period. As Adam Smith's Wealth of Nations had during an earlier period, Mill's Principles dominated economics teaching. In the case of Oxford University it was the standard text until 1919, when it was replaced by Marshall's Principles of Economics. Mill promoted substituting capitalist businesses with worker cooperatives, he says: The form of association, which if mankind continue to improve, must be expected in the end to predominate, is not that which can exist between a capitalist as chief, work-people without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, working under managers elected and removable by themselves. Pierre-Joseph Proudhon developed a theoretical system called mutualism, which attacks the legitimacy of existing property rights, corporations and rent.
Proudhon envisioned a decentralized market where people would enter the market with equal power, negating wage slavery. Proponents believe that cooperatives, credit unions, other forms of worker ownership would become viable without being subject to the state. Market socialism has been used to describe some individualist anarchist works which argue that free markets help workers and weaken capitalists. For American anarch
Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate managers and corporate shareholders to a larger group of public stakeholders that includes workers, suppliers and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit and deny the polity a democratic voice in economic policy decisions. In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's inherent effective demand gap. Proponents of economic democracy argue that modern capitalism periodically results in economic crises characterized by deficiency of effective demand as society is unable to earn enough income to purchase its output production. Corporate monopoly of common resources creates artificial scarcity, resulting in socio-economic imbalances that restrict workers from access to economic opportunity and diminish consumer purchasing power.
Economic democracy has been proposed as a component of larger socioeconomic ideologies, as a stand-alone theory and as a variety of reform agendas. For example, as a means to securing full economic rights, it opens a path to full political rights, defined as including the former. Both market and non-market theories of economic democracy have been proposed; as a reform agenda, supporting theories and real-world examples range from decentralization and economic liberalization to democratic cooperatives, public banking, fair trade and the regionalization of food production and currency. According to many analysts, deficiency of effective demand is the most fundamental economic problem; that is, modern society does not earn enough income to purchase its output. For example, geographer David Harvey claims, "Workers spending their wages is one source of effective demand, but the total wage bill is always less than the total capital in circulation, so the purchase of wage goods that sustain daily life is never sufficient for the profitable sale of the total output".
While balanced mixed economies have existed throughout history, veteran Project Manager for the U. S. Treasury Department, Richard C. Cook and other critics claim that command economies are predominate, citing state capitalism and imperialism as related; as common resources are monopolized by imperial centers of wealth and power, conditions of scarcity are imposed artificially upon the majority, resulting in large-scale socio-economic imbalance. In the Georgist view of any economic system, "wealth" includes all material things produced by labor for the satisfaction of human desires and having exchange value. Land and capital are considered the essential factors in producing wealth. Land includes all natural forces. Labor includes all human exertion. Capital includes the portion of wealth devoted to producing more wealth. While the income of any individual might include proceeds from any combination of these three sources—land and capital are considered mutually exclusive factors in economic models of the production and distribution of wealth.
According to Henry George: "People seek to satisfy their desires with the least exertion". Human beings interact with nature to produce goods and services that other human beings need or desire; the laws and customs that govern the relationships among these entities constitute the economic structure of a given society. Alternately, David Schweickart asserts in his book, After Capitalism: "The structure of a capitalist society consists of three basic components: "The bulk of the means of production are owned, either directly by individuals or by corporations that are themselves owned by private individuals. "Products are exchanged in a market --, to say and services are bought and sold at prices determined for the most part by competition and not by some governmental pricing authority. Individual enterprises compete with one another in providing goods and services to consumers, each enterprise trying to make a profit; this competition is the primary determinant of prices. "Most of the people who work for pay in this society work for other people, who own the means of production.
Most working people are'wage labourers'". Supply and demand are accepted as market functions for establishing prices. Organisations endeavor to 1) minimize the cost of production. But, according to David Schweickart, if "those who produce the goods and services of society are paid less than their productive contribution" as consumers they cannot buy all the goods produced, investor confidence tends to decline, triggering declines in production and employment; such economic instability stems from a central contradiction: Wages are both a cost of production and an essential source of effective demand, resulting in deficiency of effective demand along with a growing interest in economic democracy. In chapter 3 of his book, "Community Organizing: Theory and Practice", Douglas P. Biklen discusses a variety of perspectives on "The Making of Social Problems". One of those views suggests that "writers and organizers who define social problems in terms of social and economic democracy see problems not as the experiences of poor people, but as the relationship of poverty to wealth and exploitation".
Biklen states that according to this viewpoint: orporate power, upper class power, uneven distribution of wealth and prejudice cause social problems... he problem is not one of poverty, but of enormous wealth. The problem is not one o