ABSTRACT
Economists rarely define economic power with precision. To possess economic power is to be able to exercise significant control over the decisionmaking process. In a sense, the institutionalist’s concern with power and its implications for the economy is an extension of the more general unwillingness among institutionalists to follow orthodox economists in their ceteris paribus assumptions. In mainstream theory, the actual locus of power is coterminous with where it is assumed to be. Milton Friedman has written more than perhaps any other modern economist on the positive nature of the neo-classical system as it pertains to current mainstream economics. The field of industrial organization has been traditionally the area where efforts to develop public policy have caused mainstream economists to drop the traditional assumptions of micro-theory with their reassuring laissez-faire implications for public policy. Public choice theory, therefore, may be viewed as a part of public finance.
