Canada Microeconomics

16W

The Politics of Economics

LEARNING OBJECTIVES

After studying this chapter, you should be able to

1.

Summarize the major economic goals of right-wingers, and explain how they

believe these can best be achieved.

2.

Summarize the major economic goals of left-wingers, and explain how they

believe these can best be achieved.

3.

Explain why it is generally believed that the most effective approach to economic issues involves government policies that contain a balance of the left and

right approaches.

This chapter

The Politics of Economics

can be found on the Companion

Website at www.pearsoned.ca/lyons.

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Chapter 16W

Much of this book has been about how markets generate economic prosperity by

providing incentives for the efficient and effective use of economic resources.

However, as we saw in Chapters 2 and 12, a market system also tends to generate

certain problems, which have led governments to intervene in the economy, particularly in the areas of what should be produced and how it should be divided up.

Chapter 12 also showed that the fields of economics and politics are closely intertwined. Because they affect people in so many important ways, economic issues often

become major political issues, and there are sharply divided views regarding the appropriate role of government in the economy. Often, profoundly different philosophies

concerning economic and social matters and values underlie such disagreements. This

chapter provides a rudimentary guide to these different philosophies, which are usually

described as right wing (or simply “right”) and left wing (or “left”), and how they apply

to economic issues.

How Right-Wingers See the World

www.fraserinstitute.ca

The right-wing view is characterized by a strong belief in free enterprise, the market

system, and individual responsibility for one’s own economic fate or fortune. Rightwingers tend to believe that, generally, the best solution to economic problems...