Working Papers in Economics
No 292:
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
Rick Wicks ()
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.
Keywords: communities; meta-economic efficiency; Relational Models theory; social capital; social goods; three spheres.; (follow links to similar papers)
JEL-Codes: A12; A13; B52; D20; H10; O30; P00; Z10; (follow links to similar papers)
45 pages, March 10, 2008, Revised January 1, 2009
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Wicks, Rick, (2009), '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', International Journal of Social Economics, Vol. 36, No. 5, pages 535-65
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