Economics Dictionary of ArgumentsHome
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| Government policy: Government policy refers to a set of principles, guidelines, or actions established by a governing body to address specific issues or achieve desired outcomes within a society or economy, such as economic growth, social welfare, healthcare, education, or foreign relations. See also Government budget, Government debt, Politics, Society, Economy._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Joseph A. Schumpeter on Government Policy - Dictionary of Arguments
Sobel I 28 Government policy/Schumpeter/Sobel/Clemens: Schumpeter's ideas about the functioning of government were likely informed by his first-hand experience as the minister of finance of Austria. At the time, and even today, much of the economic analysis of government intervention relied on a set ofimplicit (sometimes explicit) assumptions about the actors in the political sphere - that they are selfless, benevolent, leaders and bureaucrats worried only about the public interest, untouched by influence from interest groups. Indeed, much of the interventionist approach to macroeconomic policy championed by John Maynard Keynes implicitly relies on the wise actions of benevolent government actors who selflessly worry about the common good. SchumpeterVsKeynes: Schumpeter knew from his own experience that these assumptions were incorrect. >John Maynard Keynes, >Keynesianism. Democracy: Schumpeter understood that democracy was merely an alternative process for producing social and economic outcomes, and "it would not necessarily follow that the political decisions produced by that process from the raw material of those individual volitions would represent anything that could in any convincing sense be called the will of the people" (CSD(1): 254). Regarding the idea that government pursues some common good, Schumpeter argues: „There is, first, no such thing as a uniquely determined common good that all People could agree on or be made to agree on by the force of rational argument. This is due not primarily to the fact that some people may want things other than the common good but to the much more fundamental fact that to different individuals and groups the common good is bound to mean different things ... as a consequence ... the particular concept of the will of the people ... vanishes into thin air.“ (CSD(1): 251-252) Sobel/Clemens: Schumpeter recognized that to understand democratic outcomes one must look to understand the motivations and different desires of the individuals involved in the process, be they the voters, elected politicians, or administrators and bureaucrats running government agencies. That is, to understand democratic outcomes one must understand the role of what he termed "Human Nature in Politics". Thus, Schumpeter shared a common insight With the founders of the field of public choice, such as Nobel Laureate James Buchanan, who recognized that just because individuals step into the public sphere, they do not suddenly start acting for the common good - instead they continue to be self-interested actors concerned With their own goals and desires. >James M. Buchanan, >Public Choice Theory, >Public Choice. Democracy/Schumpeter: According to Schumpeter, democracy is best understood as follows: "it may be put into the nutshell of a definition ... the democratic method is that institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for people's vote" (CSD(1): 269). According to Schumpeter, as far as there are genuine group-wise volitions ... we are now able to insert them in exactly the role they actually play … called to life by some political leader who turns them into political factors ... by working them up and by including eventually appropriate items in his competitive offering ... The incessant competitive struggle to get into offce or to Stay in it imparts to every consideration of policies and measures the bias so admirably expressed by the phrase about "dealing in votes". (CSD(1): 270, 287)._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Sobel I Russell S. Sobel Jason Clemens The Essential Joseph Schumpeter Vancouver 2020 |
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> Counter arguments against Schumpeter
> Counter arguments in relation to Government Policy
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