IDEAS home Printed from https://ideas.repec.org/p/hhs/gunwpe/0292.html
   My bibliography  Save this paper

A Model of Dynamic Balance among the Three Spheres of Society – Markets, Governments, and Communities – Applied to Understanding the Relative Importance of Social Capital and Social Goods

Author

Listed:
  • Wicks, Rick

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

This paper revisits old questions of the proper subject and bounds of economics: Does economics study “provisioning”? or markets? or a method of reasoning, self-interested rational optimization? A variety of scholars and others in many fields make use of a taxonomy of society consisting of three “spheres”: markets, governments, and communities. It is argued here that this tripartite taxonomy of society is fundamental and exhaustive. A variety of ways of understanding this taxonomy are explored, especially Fiske’s (1991, 2004) Relational Models theory. Then – after communities and their products, social goods, are defined more thoroughly – a visual model of interactions among the three spheres is presented. The model is first used briefly to understand the historical development of markets. The model is then applied to understanding how economic thinking and market ideology, including the notion of social capital, can be destructive of communities and their production of social goods (and their production of social capital as well). It’s not possible to measure these effects monetarily, so calculating precisely “how this affects results” in a standard economic model is impossible. Nevertheless we could better prepare students for real-world analysis, and better serve our clients, including the public, if – whenever relevant, such as in textbook introductions and in benefit/cost analyses – we made them aware of the limitations of economic analysis with respect to communities and social goods. The three-spheres model offered here, based on Fiske’s Relational Models theory, facilitates this awareness.

Suggested Citation

  • Wicks, Rick, 2008. "A Model of Dynamic Balance among the Three Spheres of Society – Markets, Governments, and Communities – Applied to Understanding the Relative Importance of Social Capital and Social Goods," Working Papers in Economics 292, University of Gothenburg, Department of Economics, revised 01 Jan 2009.
  • Handle: RePEc:hhs:gunwpe:0292
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/2077/9680
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hillinger, Claude, 2008. "Science and Ideology in Economic, Political and Social Thought," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-70.
    2. Smith, Adam, 1759. "The Theory of Moral Sentiments," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1759.
    3. Robert H. Frank & Thomas Gilovich & Dennis T. Regan, 1993. "Does Studying Economics Inhibit Cooperation?," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 159-171, Spring.
    4. Dolfsma, W.A. & Finch, J. & McMaster, R., 2004. "Market and Society: How do they relate, and contribute to welfare?," ERIM Report Series Research in Management ERS-2004-105-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    5. Konow, James & Earley, Joseph, 2008. "The Hedonistic Paradox: Is homo economicus happier," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 1-33, February.
    6. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 715-753.
    7. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, April.
    8. Buchanan, James M, 1978. "Markets, States, and the Extent of Morals," American Economic Review, American Economic Association, vol. 68(2), pages 364-368, May.
    9. I. M. D. Little, 1949. "The Foundations Of Welfare Economics," Oxford Economic Papers, Oxford University Press, vol. 1(2), pages 227-246.
    10. McCloskey, Deirdre N., 1998. "Bourgeois Virtue and the History of P and S," The Journal of Economic History, Cambridge University Press, vol. 58(02), pages 297-317, June.
    11. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 151-182, July.
    12. Daniel B. Klein & Pedro Romero, 2007. "Model Building versus Theorizing: The Paucity of Theory in the _Journal of Economic Theory_," Econ Journal Watch, Econ Journal Watch, vol. 4(2), pages 241-271, May.
    13. Laurence R. Iannaccone, 1998. "Introduction to the Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1465-1495, September.
    14. Hirschman, Albert O, 1982. "Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble?," Journal of Economic Literature, American Economic Association, vol. 20(4), pages 1463-1484, December.
    15. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
    16. Baron, James N & Hannan, Michael T, 1994. "The Impact of Economics on Contemporary Sociology," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1111-1146, September.
    17. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    18. Marwell, Gerald & Ames, Ruth E., 1981. "Economists free ride, does anyone else? : Experiments on the provision of public goods, IV," Journal of Public Economics, Elsevier, vol. 15(3), pages 295-310, June.
    19. Laurence R. Iannaccone, 1998. "Corrigenda [Introduction to the Economics of Religion]," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1941-1941, December.
    20. Edward O'Boyle, 2000. "Personalist Economics: Moral Convictions, Economic Realities, And Social Action," Review of Social Economy, Taylor & Francis Journals, vol. 58(4), pages 539-552.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rick Wicks, 2011. "Markets, Governments—," Challenge, Taylor & Francis Journals, vol. 54(4), pages 65-96.
    2. Wicks, Rick, 2011. "Assumption without representation: the unacknowledged abstraction from communities and social goods," MPRA Paper 51674, University Library of Munich, Germany.
    3. Wolfgang Grassl, 2011. "Hybrid Forms of Business: The Logic of Gift in the Commercial World," Journal of Business Ethics, Springer, vol. 100(1), pages 109-123, March.

    More about this item

    Keywords

    communities; meta-economic efficiency; Relational Models theory; social capital; social goods; three spheres.;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • D20 - Microeconomics - - Production and Organizations - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • P00 - Economic Systems - - General - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:gunwpe:0292. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie Andersson). General contact details of provider: http://edirc.repec.org/data/naiguse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.