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Welfare Economics and Public Policy: A Re-examination

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Abstract

Classical liberal political economists such as Rowley and Peacock (Welfare economics: a liberal restatement, York studies in economics. Martin Robertson, London, 1975) expressed serious reservations about the way Welfare Economics came to be used in the formulation of public policy. In this chapter the sources of this discontent are outlined and the liberal critique explored. Austrian, Ordo-Liberal, Public Choice and Transactions Cost elements are separately considered. None of these approaches on its own quite sums up the overall critique, which really amounts to a survey of the difficulties of reconciling neoclassical marginal economics and modern techniques with Classical Liberal Political Economy.

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Notes

  1. 1.

    It should be noted however, that Eucken's central policy target is a competitive price system where economic power would disappear completely and the market would approach the perfectly competitive benchmark. See Richter (2015). Efficiency was not the reason for favouring such a market structure, however, and the role of technical change as a threat to powerful interests was recognised.

  2. 2.

    See, for example, Cooter and Ulen (1997: 89–90).

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Authors and Affiliations

  1. University of Buckingham, Buckingham, UK

    Martin Ricketts

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  1. Martin Ricketts
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Correspondence to Martin Ricketts .

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Editors and Affiliations

  1. Department of Economics and Business, University of Catania, Catania, Italy

    Ilde Rizzo

  2. Bournemouth University, Bournemouth, Dorset, United Kingdom

    Ruth Towse

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Ricketts, M. (2016). Welfare Economics and Public Policy: A Re-examination. In: Rizzo, I., Towse, R. (eds) The Artful Economist. Springer, Cham. https://doi.org/10.1007/978-3-319-40637-4_3

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