An Exploratory Essay
New Thinking in Political Economy series
This book examines some of the material of public ﬁnance (or public economics) through ‘a diﬀerent window’, to borrow a phrase from Friedrich Nietzsche. The object of analytical interest in the theory of public ﬁnance is a government’s activities, mostly its revenues and expenditures (though any budgetary operation can be mirrored by a regulation). But through what window is this object viewed? The most commonly used window is one where government is portrayed as an entity that intervenes in society to alter the equilibrium pattern of market-generated outcomes. When seen through this window, public ﬁnance appears as the activity of developing knowledge about the consequences of diﬀerent interventionist actions by governments. When viewed through my alternative window, public ﬁnance appears as a form of social theorizing. If the aim of market theorizing is to explain how people are able to generate generally orderly patterns of activity when they relate to one another through private property, the coordinate aim of ﬁscal theorizing is similarly to explain how orderly patterns of activity emerge when people relate to one another in the particular form of collective property that constitutes a state. A comprehensive social theory might thus be thought to entail a combination of market theory and ﬁscal theory, taking care to incorporate the forms of civic association as well. Through this alternative window, government appears as one of several interrelated arenas within which people interact inside a society. The pure theory of a market economy treats property rights as absolute....