The Resolution of Economic Conflicts: Beyond the Economic System

Carlos Obregón Díaz

MPRA Paper from University Library of Munich, Germany

Abstract: Economic conflict resolution historically has been seen, by the main schools of economic thought, as the distribution of given, scarce resources. The neoclassical school argued that the distribution was efficiently solved by the price system, and the Marxist school argued that a revolution to distribute wealth and income in favor of the less privileged was required. Both have been wrong. Modern economic theory in information economics, game theory and institutional economics has shown that: the solution to any economic conflict has to be evaluated in a dynamic setting, and requires an adequate institutional arrangement that provides information to the economic agents and develops trust amongst them. Free efficient markets and proper distribution policies are still required. Institutions cannot replace markets, the price system is very efficient, and it is required for an appropriate conflict resolution – but markets only work well if the institutional arrangement is favorable. And income distribution policies have to be designed within a strong integrative system with a proper economic growth program, so that whatever is distributed is socially agreed, and economic growth leaves everybody better off. The main lesson learnt in this manuscript is that: the analysis of economic conflict does not have a solution within the economic system itself, the solution requires an institutional arrangement of trust that necessarily involves the integrative system. The institutional arrangement required for economic progress, full employment and adequate income distribution goes well beyond the economic system. Economic conflict resolution does not occur only within the economic system, the power system is involved because peace is required, and the integrative system is involved because trust is needed.

Keywords: Economic; conflict; historical; distribution; neoclassical school; price; Marx; revolution; Marxist school; income; Carlos Obregon; theory; market; policies; income; Carlos Obregón; peace; financial; politics; system (search for similar items in EconPapers)
JEL-codes: A10 A11 A12 A13 A14 A20 B0 B10 B13 B14 B15 B19 B24 B25 B26 B29 B30 G00 G01 G10 G12 G15 G18 G20 G21 G29 H00 (search for similar items in EconPapers)
Date: 2022-04-14
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