The Political Economy of Public Finance in Britain, 1767-1873

The Political Economy of Public Finance in Britain, 1767-1873

The Political Economy of Public Finance in Britain, 1767-1873

The Political Economy of Public Finance in Britain, 1767-1873

Synopsis

The period between 1767 and 1873 shaped public finance in Britain (and, by extension, many other countries) as we know it today and all the major economists of the period proved influential. This book analyses the impact of Steuart, Smith, Malthus, Ricardo, Mill and others.

Excerpt

This book examines the history of the efforts of Enlightened and Victorian British political economists to address fiscal problems. It covers the period from the publication of Sir James Steuart's Inquiry into the Principles of Political Oeconomy in 1767, to John Stuart Mill's death in 1873. Besides these two authors, Adam Smith, Jeremy Bentham, Thomas Robert Malthus, David Ricardo, and John Ramsay McCulloch will be discussed. All seven authors wrestled with the problem raised by David Hume - how to found general principles of political economy which could handle the issue of public finance. Although seven authors' views on public finance have been examined individually - for example, in Shoup (1960), Hollander (1985:858-80), and O'Brien (1970:229-70) - a full-scale comparative study has hitherto not been made, with an exception of O'Brien (1975:241-70).

Some of the authors - typically Smith and Ricardo - have often been referred to as 'laissez-faire economists'. However, in contrast to the general impression created by such a label, they did not disregard the issue of public finance. Moreover, Smith's and Ricardo's attitudes to policy were quite different. In contrast, Malthus - often labelled as an 'interventionist' - did not treat public finance as a separate topic, although he regarded this issue as important. In fact, all seven authors considered public finance as one of the main elements of their political economy. Thus, the traditional laissez-faire/interventionist dichotomy is neither a useful measure of the importance our authors attached to the issue of public finance, nor a sufficient explanation of the differences between their opinions.

This book is distinct from ordinary books on the history of economic thought in giving as much weight to Steuart, Bentham, and McCulloch as to Smith, Ricardo, Malthus, and Mill. Steuart is usually excluded from the group of 'classical economists', because he understood neither the market mechanism nor the theory of surplus value. Steuart has often been called - contemptuously - 'the last mercantilist'. In contrast, in this book Steuart will be treated as the first author who integrated public finance into a systematic account of political economy.

Bentham's views of public finance have not been paid a great attention

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