The Concept of Power in Economic Theory
 
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Publish date: 2007-04-30
 
Gospodarka Narodowa 2007;215(4):15–32
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ABSTRACT
The article examines the role of power in economic theory, with a special focus on the microeconomic theories of the firm. The aim of the paper is twofold. First, the author provides a comprehensive explanation of the concept of power in an enterprise. Second, he attempts to prove that microeconomic theories of the firm may benefit considerably from the theory of power and its findings. The author develops an expanded definition of power based on Dahl’s concept. Two key theoretical approaches to power are presented: managerial and critical. The role of power in neoclassical, behavioral, managerial, institutional, new-institutional and micro-micro theories is examined. The author checks if the findings of the theory of power can be incorporated into microeconomic theories. The analysis reveals that the concept of power is not fully utilized and sometimes even neglected by microeconomic theory. This is despite the fact that the theory of power can enrich the microeconomic view and understanding of the enterprise, Miroński says. He looks at power as a neutral (not necessarily negative), dynamic and complex concept that can help explain many important microeconomic issues. Behavioral and managerial theories propose many alternative goals of the enterprise, and the concept of power may help predict which of these goals would dominate in a given situation. Transaction costs or “ineffectiveness X” from Leibenstein’s micro-micro theory are influenced by power relations within the company. Further research into the application of the theory of power in economic theory seems to be both justified and promising, Miroński concludes.
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ISSN:0867-0005