Local government

Although the United Kingdom is a unitary state, not a federal one, a very large part of the public services are administered by elected local councils (local authorities) which together employ more than two million people.

London employs only one-third of this number. Scotland and Northern Ireland have their own systems which are not quite the same as that of England and Wales.

All local authorities derive their existence and their powers and functions from Parliament and the central government. Parliament can take powers away or add to them, and it can even abolish any particular authority, or group or class of authorities if it wants to.

Although Parliament has these powers over local authorities, and has used them recently, it does not exercise any detailed supervision through any office of the nature of prefect or local governor. Many of the activities of local authorities are in fact supervised, advised or controlled by the central government. But in each area the elected council and its officers have direct relations with the various central government departments - though these may have regional offices through which some of the central-local relations are conducted.

Traditionally, the most important local area is the county. England has been divided into counties for more than 1,000 years ago. Most of these counties those near the outer edges of England, have the old word 'shir" in their names e.g. Yorkshire. In each county the Queen appoints a Lord Lieutenant as her representative, now only for ceremonial purposes.

Within the counties the oldest units are the parishes. These arc the local communities or villages which became established in the Middle Ages, each with a church as its focal point.

Until 1888 they were important units of administration. Although they still survive and have elected parish councils they have almost no power of their own.

From the early Middle Ages, as some villages grew into towns, the Crown gave them 'charters of incorporation' as 'boroughs' or 'cities', with their own mayors and councils.

Modern Economic Thought

Modern economic thought began with Adam Smith in the late 18^th century, although earlier thinkers such as the Spanish scholastics and the physiocrats made important contributions. Modern economics began with J.S. Mill focusing on what was called “political economy” which he defined exclusively in relation to the exchange value of objects, or what would now be called price.

Today it is customary to consider Adam Smith the founder of economic theory. The central idea promoted by Smith was that the competition between various suppliers and buyers would produce the best possible distribution of goods and services, because it would encourage individuals to specialize and improve their capital, so as to produce more value with the same labour. Smith’s thesis rests on the belief that large systems can be self-regulating by the activity of their parts. Smith’s formulation is called the “invisible hand” and is still the main idea of market economics.

In the early 20^th century, economics became increasingly statistical, and the study of econometrics became important. Statistical treatment of price, unemployment, money supply and other variables became more and more central to economic disputes.

In principle, economics can be applied to any of economic organization. However, the majority of economic theories describes systems where goods are exchanged in the market – where buyers and sellers seek to maximize their results by trading. The dominant form of market economics focuses on societies where property is owned by individuals, money has a rational basis, and profit comes from utilizing labour and capital to produce goods to be sold in the market.

In the late 20^th century, three of the areas of study which are producing change in economic thinking are: risk based rather than price based models, imperfect economic actors, and treating economics as a biological science based on evolutionary norms rather than abstract exchange.