ABSTRACT
Contemporary institutional economics theory has come a long way, but it has further to go in recognizing the role of power in the economy. In this chapter – a book review essay – I want to both explore some of the emerging complementarities in this theory, and where power issues might be better inserted. Kurt Rothchild (2002) has noted that economists can’t be accused of overlooking power, but that much of economics makes it of secondary importance. John Kenneth Galbraith (1973) suggested that there were two ideas in economics that tended to remove power from the subject of economics. These were the concepts of the sovereign consumer and voter. Power could not exist in competitive markets and the state is subordinate to the instruction of the citizen. But, Galbraith argued that the corporation had the power to shape consumer demand and lobby government for what it needed. These points are still valid, but other concepts have developed to hide the role of power. To be more useful, economists will have to become more troublesome and expose what is at stake in inevitable power play.
