Markets and Governments: a Theoretical Appraisal

The discipline of economics occupies a central role in the social sciences. Its conclusions are a key reference in public discussions. From a theoretical point of view, however, the foundations of the discipline appear far from being unambiguously established. Its basic prescriptions rest on assumptions which still deserve to be more fully understood and explicitly discussed. The MGTA initiative attempts at reexamining a very classic theme in economic thought, the tension between markets and governments, from the perspective of contemporary economic theory.

This year's summer school will focus on power.

While power is abstracted away in the fictional world of perfectly competitive markets, asymmetric bargaining power, market power, and political power are pervasive phenomena in actual economies. Market outcomes are shaped by power inequalities, with both distributive and efficiency implications. For instance, the market power of firms affects how much consumers have to pay for goods and services and how much money the recipients of capital income can make. But it also affects, dynamically, technological progress and growth: market power may stifle innovation.

Government interventions may be required to redress major power imbalances but policies themselves are not designed in a vacuum as government decisions are affected by powerful actors in the political sphere, as well as by (powerful) vested interests. But power may matter, normatively, beyond its effect on efficiency and distribution: major power imbalances between economic actors may be disputable per se, as they undermine fundamental relational values. Thus, a focus on power provides an interesting counterpoint to the distributive focus that dominates normative analyses in economics.

This year's summer school will discuss the notion of power in its many dimensions, focusing on ways to conceptualise (and model) power in economics, the effects of power in goods markets and in the labour market, the normative implications of power asymmetries, the gendered dimension of power, possible interventions to mitigate unequal distributions of power.

The school aims at offering a critical review of all these issues. We will alternate traditional lectures by academics who have contributed to different areas of contemporary economic theory, with discussions around the presentation of recently published texts. In particular, the school aims to provide an opportunity to contrast contemporary economic theory with recent developments in political philosophy.

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