Government and Economic Activity

Abstract

“When the national or social community which we call a ‘State’ has a constitution based on democratic principles, it may be said that the functions of the State are determined by the ‘general welfare’.” ¹ The functions are embodied in objectives, which together form the government’s programme of action. The concept ‘general welfare’ has a different material content according to time and place and the volume and the structure of the government’s functions and tasks change accordingly. These changes result from the evolution of the prevailing social philosophy, which at the same time selects appropriate measures from the alternatives indicated by economic theory. But, in the course of time, theoretico-economic opinions deepen too, so that two dogmatic-historical interdependent evolutions are discernable. The first relates to the views concerning the government’s task, the second to the efficiency of certain politico-economic measures. These two courses of development have not always kept abreast of each other. On the one hand, radical socio-political changes have taken place in the course of centuries and the conceptions of the State’s task have widened and deepened. But, on the other hand, the evolution of the theoretico-economic insight has long been kept in check by the idea of harmonie économique.