Countervailing power, or countervailance, is the idea in political theory that the wielding of power by two or more groups, centers, or sets of interests within a polity can, and often does, yield beneficial effects through productive opposition and containment between opposing forces. As a political concept, it resembles those of agonism, agonistic pluralism, and checks and balances, encapsulated in the often-quoted phrase from Federalist No. 51 that "ambition must be made to counteract ambition." The notion of countervailance has been applied in both politics and economics.
In political theory, countervailance dates back at least to Medieval times, especially in reformist Roman Catholic and early Protestant movements. The Conciliar Movement, although ultimately ending in failure to reform the Catholic Church, "raised issues that are fundamental in all domains of social organization, and it contributed to the understanding of the general principle of countervailance, which eventually became the foundation of modern constitutionalism." [1] The constitutional organization of government, which implies moderation achieved through countervailing forces, stands in contrast to polities where power is concentrated, unchecked, and can be used despotically. Examples of the latter include principalities where "various princes were absolute rulers in their domain", [1] absolutist monarchies, and modern authoritarian and totalitarian governments.
17th-century England was an important setting for the development of countervailance theory. It was during this period that "the operational dynamics of the system developed in accordance with the countervailance model of government." [2] While the trend reversed somewhat under the power of Oliver Cromwell and the era of the later Stuarts, and was therefore rather uneven over the flow of the 17th century, the Glorious Revolution of 1688 "firmly established the principles of dispersed power and checks and balances as the central pillars of English constitutionalism." [2]
Contemporary research in political science and constitutionalism emphasizes the importance of countervailance for democratization and democratic stability. A 2021 study found that power dispersion and countervailance during constitution-making encourages the development of institutions that protect opposition parties from arbitrary use of executive power without unduly impairing majority rule, thus fostering democracy. [3]
In economics, the famous American economist John Kenneth Galbraith developed the concept of "Countervailing Power" in his 1952 book American Capitalism to refer to the political regulation of markets. In the classic liberal economy, goods and services are provided and prices set by free bargaining between isolated individual agents. According to Galbraith, however, large business corporations wield enormous power to bias market processes in modern economies. 'Countervailing' powers in the form of trade unions, citizens' organizations and others are crucial to offset business's excessive advantage. [4] On page 126 of his book, Galbraith elaborates on countervailing power in the sphere of economics when he states:
"The development of countervailing power requires a certain minimum opportunity and capacity for organization, corporate or otherwise. If the large retail buying organizations had not developed the countervailing power which they have used, by proxy, on behalf of the individual consumer, consumers would have been faced with the need to organize the equivalent of the retailer's power. This would have been a formidable task but it has been accomplished in Scandinavia where the consumer's co-operative, instead of the chain store, is the dominant instrument of countervailing power in consumers' goods markets."
A constitution is the aggregate of fundamental principles or established precedents that constitute the legal basis of a polity, organization or other type of entity, and commonly determines how that entity is to be governed.
Public choice, or public choice theory, is "the use of economic tools to deal with traditional problems of political science." Its content includes the study of political behavior. In political science, it is the subset of positive political theory that studies self-interested agents and their interactions, which can be represented in a number of ways—using standard constrained utility maximization, game theory, or decision theory. It is the origin and intellectual foundation of contemporary work in political economy.
James McGill Buchanan Jr. was an American economist known for his work on public choice theory originally outlined in his most famous work, The Calculus of Consent, co-authored with Gordon Tullock in 1962. He continued to develop the theory, eventually receiving the Nobel Memorial Prize in Economic Sciences in 1986. Buchanan's work initiated research on how politicians' and bureaucrats' self-interest, utility maximization, and other non-wealth-maximizing considerations affect their decision-making. He was a member of the Board of Advisors of The Independent Institute as well as of the Institute of Economic Affairs, a member of the Mont Pelerin Society (MPS) and MPS president from 1984 to 1986, a Distinguished Senior Fellow of the Cato Institute, and professor at George Mason University.
John Kenneth Galbraith, also known as Ken Galbraith, was a Canadian-American economist, diplomat, public official, and intellectual. His books on economic topics were bestsellers from the 1950s through the 2000s. As an economist, he leaned toward post-Keynesian economics from an institutionalist perspective.
An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society. It includes the combination of the various institutions, agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community.
Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behavior. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the other. Its name and core elements trace back to a 1919 American Economic Review article by Walton H. Hamilton. Institutional economics emphasizes a broader study of institutions and views markets as a result of the complex interaction of these various institutions. The earlier tradition continues today as a leading heterodox approach to economics.
Mixed government is a form of government that combines elements of democracy, aristocracy and monarchy, ostensibly making impossible their respective degenerations which are conceived in Aristotle's Politics as anarchy, oligarchy and tyranny. The idea was popularized during classical antiquity in order to describe the stability, the innovation and the success of the republic as a form of government developed under the Roman constitution.
Rechtsstaat is a doctrine in continental European legal thinking, originating in German jurisprudence. It can be translated into English as "rule of law", alternatively "legal state", state of law, "state of justice", or "state based on justice and integrity". It means that everyone is subjected to the law, especially governments.
Constitutional theory is an area of constitutional law that focuses on the underpinnings of constitutional government. It overlaps with legal theory, constitutionalism, philosophy of law and democratic theory. It is not limited by country or jurisdiction.
Budget theory is the academic study of political and social motivations behind government and civil society budgeting. Classic theorists in Public Budgeting include Henry Adams, William F. Willoughby, V. O. Key, Jr., and, more recently, Aaron Wildavsky. Notable recent theorists include Frank R. Baumgartner, Bryan D. Jones, Richard Fenno, Allen Schick, Dennis Ippolito, Naomi Caiden, Irene Rubin, James D. Savage, Thomas Greitens, Gary Wamsley, and Usman W. Chohan. Budget theory was a central topic during the Progressive Era and was much discussed in municipal bureaus and other academic and quasi-academic facilities of that time such as the nascent Brookings Institution.
The history of economic thought is the study of the philosophies of the different thinkers and theories in the subjects that later became political economy and economics, from the ancient world to the present day.
The Beijing Consensus or China Model, also known as the Chinese Economic Model, is the political and economic policies of the People's Republic of China (PRC) that began to be instituted by Deng Xiaoping after Mao Zedong's death in 1976. The policies are thought to have contributed to China's "economic miracle" and eightfold growth in gross national product over two decades. In 2004, the phrase "Beijing Consensus" was coined by Joshua Cooper Ramo to frame China's economic development model as an alternative—especially for developing countries—to the Washington Consensus of market-friendly policies promoted by the IMF, World Bank, and U.S. Treasury. In 2016, Ramo explained that the Beijing Consensus shows not that "every nation will follow China’s development model, but that it legitimizes the notion of particularity as opposed to the universality of a Washington model".
The following outline is provided as an overview of and topical guide to economics:
The rule of law is a political ideal that all citizens and institutions within a country, state, or community are accountable to the same laws, including lawmakers and leaders. It is sometimes stated simply as "no one is above the law". The term rule of law is closely related to constitutionalism as well as Rechtsstaat. It refers to a political situation, not to any specific legal rule. The rule of law is defined in the Encyclopædia Britannica as "the mechanism, process, institution, practice, or norm that supports the equality of all citizens before the law, secures a nonarbitrary form of government, and more generally prevents the arbitrary use of power."
Constitutional economics is a research program in economics and constitutionalism that has been described as explaining the choice "of alternative sets of legal-institutional-constitutional rules that constrain the choices and activities of economic and political agents". This extends beyond the definition of "the economic analysis of constitutional law" and is distinct from explaining the choices of economic and political agents within those rules, a subject of orthodox economics. Instead, constitutional economics takes into account the impacts of political economic decisions as opposed to limiting its analysis to economic relationships as functions of the dynamics of distribution of marketable goods and services.
The rule according to a higher law is a statement which expresses that no law may be enforced by the government unless it conforms with certain universal principles of fairness, morality, and justice. Thus, the rule according to a higher law may serve as a practical legal criterion to qualify the instances of political or economical decision-making, when a government, even though acting in conformity with clearly defined and properly enacted law, still produces results which many observers find unfair or unjust.
Constitutionalism is "a compound of ideas, attitudes, and patterns of behavior elaborating the principle that the authority of government derives from and is limited by a body of fundamental law".
New constitutionalism is derived from the classical neo-liberalism framework and represents a set of political policies that promote a new global order. The goal of new constitutionalism is to separate the democratic and economic practices by shifting economic aims from the regional and national level to the global level through constitutional framework. The purpose of this shift is to create global supremacy and promote a free capitalist system.
Transaction Man: The Rise of the Deal and the Decline of the American Dream is a non-fiction book which chronicles the role of corporations in relation to the American economy and shifts in public policy by Nicholas Lemann, who is a veteran journalist and a The New Yorker staff writer.
Common good constitutionalism is a legal theory formulated by Harvard law professor Adrian Vermeule that asserts that "the central aim of the constitutional order is to promote good rule, not to 'protect liberty' as an end in itself". Vermeule describes it as an attempt to revive and develop the classical legal tradition by understanding enacted law as a positive application of background natural law principles. Within this tradition, he claims law is defined as "an ordinance of reason promulgated by political authorities for the common good." Vermeule states that law in this sense is "not tethered to particular written instruments of civil law or the will of the legislators who created them" but instead embody rational determinations of the common good, and it is those determinations, as well as the natural law background against which they are made, which constitute the law. Vermeule says that these principles include "a candid willingness to "legislate morality."
the Republic of Venice ... city-state constructed a political system based firmly on the principle of countervailance
The toleration of an aberrant religion means that its adherents are left free to preach, publish and organize. Where such freedoms exist for religious groups, the cannot be effectively denied to citizens who have other agendas. ... During the eighteenth century, the countervailance model of British government was embraced by all the major writers on the subject. It appears to have been generally accepted until Walter Bagehot and A.V. Dicey initiated in the nineteenth century a reinterpretation of the English constitution in terms of the doctrine of parliamentary sovereignty.