Microeconomic Theory Seminar

In a capitalist democracy there are essentially two methods by which social choices can be made: voting, typically used to make “political” decisions, and the market mechanism, typically used to make “economic” decisions. In the emerging democracies with mixed economic systems, Great Britain, France, and Scandinavia, the same two modes of making social choices prevail, though more scope is given to the method of voting and to decisions based directly or indirectly on it and less to the rule of the price mechanism. Elsewhere in the world, and even in smaller social units within the democracies, the social decisions are sometimes made by single individuals or small groups and sometimes (more and more rarely in this modern world) by a widely encompassing set of traditional rules for making the social choice in any given situation, e.g., a religious code.