Roles that law plays in a market economy.

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Identify and analyze some of the roles that law plays in a market economy.
Compare and contrast the perspectives of neoclassical and new institutional economics
(NIE) with perspectives from one or more ‘critical’ traditions (critical political economy;
legal realism; critical legal studies; law and political economy).

Sample Solution

Roles that law plays in a market economy

In the real world, no economy actually conforms totally to the idealized world of the smoothly functioning invisible hand. Rather, every market economy suffers from imperfections which lead to such ills as excessive pollution, unemployment and extremes of wealth and poverty. For all these reasons, any government anywhere in the world, whether conservative or liberal, intervenes in economic affairs. According to Samuelson and other modern economists, governments have four main functions in a market economy: to increase efficiency, to provide infrastructure, to promote equity, and to foster macroeconomic stability and growth.

 

In the 1920s the introduction of new technologies brought with it new communications tools that would change how people received, interacted and discussed information. The introduction of the radio gradually reduced the importance of the newspaper, especially as they came down in price, because news spread much more quickly and immediately over the radio than was the case with newspapers. “Radio coverage of presidential campaigns began in 1924 and expanded dramatically in the 1930s” (Gentzkow et al. 2986) and the first president to publicly communicate to the country in real time was Calvin Coolidge, in 1923 through the use of the radio (Morgan RealClear.com).
Public expectations of presidents changed with the introduction of the radio. During the golden age of American newspapers, public expectations of presidents were distinguished by the way they looked and what they were said to have said. With the introduction of radio, public expectations of presidents began to be shaped by how they talked and how they were perceived to behave, through speech. This changed the character of the presidency. “Public expectations of presidential communication formed in conjunction with the development of a more public rhetorical presidency at the beginning of the 20th century” (Scacco and Coe 302) and have continued to operate since that time. The concept of a rhetorical presidency is derived from political communication theory and is argued to be witnessed when “a decline in party strength and a changing media environment led presidents to bypass the bargaining processing in DC and “go public” with their policies instead” (Pluta 2). Rhetorical presidencies began in the 1930s, when Roosevelt, facing strong Congressional opposition to the New Deal policies that he was espousing to defeat the Great Depression, used radio to create a stronger relationship with the American people by appearing to be open, upfront and honest with them. Roosevelt’s rhetorical presidency accelerated in World War II, when Roosevelt used the radio to recreate the direct and immediate communication modes of earlier presidencies. However, while Roosevelt’s fireside chats and radio addresses were direct and immediate, they were also tightly scripted in order to garner ever-deeper support for the American war effort. In this way, presidential communications remained, as they had been with newspapers, heavily mediated.

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