Question

In: Economics

"The problem with our democratic institutions is that they don't correctly reflect the will of the...

"The problem with our democratic institutions is that they don't correctly reflect the will of the people! If the people-rather than self-interest politicians or lobbyists-had control, we would not have to worry about government taking actions that don't maximize allocation and product efficiency." Critique that statement. Do you agree or not and why.

Solutions

Expert Solution

                                    Democracy is a government ‘Of the people, For the People and By the people’, wherein all the democratic powers are being elected by the people themselves. Democratic institutions with reference to product efficiency of a nation refers to those financial institutions that functions within the framework of democracy and financial principles to look after its economy. I somewhat disagree to the above statement. Since a democracy is run by people who are elected within themselves, they have all the power to decide on who should rule them and take decisions for them. Moreover, those people are always bound by law and are responsible to the people who have elected them.

                                    The above critical statement says about the people having control over the economy and taking decisions rather than the functionaries who are designed to do so. With many nations having huge population, the statement in itself is an irregular one since all the people’s decisions could not be implemented in an economy so as to maximise allocations and improve the product efficiency. Here, the authorities have made clear distinctions on the economy of a nation and what economic principles should govern the nation as it suites. Moreover, it has to be understood that it is not about the people, but it is with respect to those economic principles that an economy functions. There are many economic factors that are to be considered before each decision is taken in an economy. The major fault in granting he decision making power based on the consent of each individual lies in this fact. To have advantage in certain situations, the economic principles of a nation cannot be surrendered. An economy will always undergo rise and falls depending on different sectors and the condition which a nation is currently in. Moreover, there are many external factors also that affects an economy either in a positive or in a negative way. It is in consideration with all these effects that an economy runs.

                                    Thus, we can conclude that it is those principles of economy that decides these allocations and product efficiencies. If there are some people who stands as an obstacle to this despite of having a favourable environment, it has to be dealt with legally as they are bound to the people and proper actions could be taken so that the economy of a nation gets protected at all costs.


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