Economic Institutions and the Satisfaction of Human Needs

Abstract

The purpose of this chapter is to evaluate different economic systems using as a criterion their ability to satisfy human needs. The conceptual basis is the theory of human need developed in Doyal and Gough (1991), summarised in Chapter 1. To assess the potential of economic systems to satisfy human needs, thus defined, I use a family of theoretical approaches from different disciplines broadly labelled ‘new institutionalist’ or ‘new political economy’. The economic systems to be investigated are distinguished according to their dominant organising principle: the market, the state and the community. Recognising that ‘pure’ models of each are historically and logically impossible, I evaluate combinations of institutions that are as close as possible to the pure model: minimally regulated capitalism, state socialism and variants of communitarianism. After summarising my conclusions at that point, I then, in the next three sections, go on to consider three variants of ‘mixed economy’ capitalism: statist capitalism, corporatist capitalism and neoliberal capitalism. Again I evaluate each according to our criteria of need satisfaction, before drawing some general conclusions.

First published in The Journal of Economic Issues 28(1), 1994, pp. 25–66. Reprinted from the Journal of Economic Issues by special permission of the copyright holder, the Association for Evolutionary Economics.