Economic governance objectives include increasing wealth, ensuring that everyone benefits, and prevention of consequential harm.
Economic governance determines how wealth can be created and spent. It is a network of power relationships between individuals, companies, governments and financial institutions – all of whom engage in economic transactions that are subject to regulation. The regulation should aim to provide acceptable outcomes for everyone.
It is assumed here that people would prefer to have more money rather than less, so economic governance objectives must include allowing the creation of more wealth. Economic growth makes it possible to deliver better public services and higher standards of living. As Labour Chancellor Rachel Reeves pointed out, there are 'Impossible trade-offs' if no UK economic growth.
The acceptability of the Economic Dimension of governance depends partly upon the perceived fairness of the distribution of the wealth in a society (although the meaning of the word ‘fairness’ is contested). As described earlier (2.2), individualists and collectivists have different ideas about what is fair. For everyone to flourish it is necessary for most to participate in wealth creation, whilst supporting the needs of those who are unable to work.
The pursuit of a strong and fair economy should not harm other aspects of people's lives. The impact of economic activity on the environment and public health must be considered, and some regulation is therefore necessary.
(This is an archive of a page intended to form part of Edition 4 of the Patterns of Power series of books. The latest versions are at book contents).