Reframing Economics

Reframing Economics

Economic Action as Imperfect Cooperation

Roger A. McCain

The objectives of this book are twofold. Firstly, it proposes that economics should be defined as a study of imperfect cooperation. Secondly, it elucidates the continuities that extend from classical political economy through the neoclassical, Keynesian, and modern economics of the twenty-first century.

Chapter 8: A grand coalition of the whole society

Roger A. McCain

Subjects: economics and finance, game theory, history of economic thought, methodology of economics


Let us suppose that society as a whole were to constitute a cooperative coalition. For the present we will not ask how such a thing might come about, but approach it purely in a spirit of "what if?" In Chapter 10 we will revisit the question of how and whether such a comprehensive grand coalition might exist, but for now it will remain purely hypothetical. Clearly such a coalition would be a very large one (even in a country with a relatively small population). In a world of free information, we might suppose that every individual could be consulted on each and every decision, and unanimity rule required, with bargaining over differences of opinion and interest. In practice it is clear that the informational costs of such a cooperative solution would be impossibly great. Some organization will be required, and that organization might be very complex. A somewhat more possible ideal would be to have some basic decisions made by a trusted third party or a group of trusted third parties. In somewhat that spirit, some early writers on economics and politics (including Machiavelli) addressed their ideas to a "Prince" who would have the power to put them into practice. The next two sections will take the point of view of an executive committee of this hypothetical grand coalition of the whole society.

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