5. T. W. Swan Economic Control in a Dependent Economy

In a system in which private enterprise predominates, economic decisions—what to buy or sell, what to produce or consume, what to lend or borrow, what price to charge or pay—are made by numerous separate persons, firms and institutions. But society has an interest in how all these decisions fit together into a social pattern, and how they add up into certain social aggregates. This reconciliation between the parts and the whole is the responsibility of an economic system and its controlling institutions. In earlier seminars we have considered the theory of Welfare Economics primarily as a critique of the pattern of production and distribution, e.g., contrasting the pattern resulting from a laissez-faire economic system of perfect competition with that of one containing important monopolistic elements, or one in which the State intervenes to regulate the allocation of resources or the distribution of incomes. Now we turn to some social objectives which can be expressed and empirically measured in terms of aggregates (or averages); and the question may be asked, not merely whether a particular economic system serves these objectives well or badly, but whether, with a given structure and institutions, it can achieve them at all.