ABSTRACT
This chapter considers three systems of economic institutions: economic individualism, economic democracy or socialism, and fascist-nationalism. Economic theory is not a descriptive, or an explanatory, science of reality. The economic theory deals with social, in the sense of inter-individual, relations. The words politics and government refer to and mean the mechanism by which any social group acts as a unit, by which it formulates and carries out group policies, whether positive or negative. Historically, the development of democratic political forms was an accompaniment of the growth of the automatic market organization in the economic realm. The free political institutions of the nineteenth century were dependent upon a delegation of the problems of economic relations to non-political automatic devices. Fascist-nationalism, then, seems to be clearly indicated as the next stage in the political evolution of the liberal democracies, including the United States. The notion of the "experimental" determination of political issues, again, is an especially vicious analogy from natural science.
