New Subjectivist Economic Theory and Public Finance

Abstract

The professional field of public finance has developed partly as a branch of economics and partly as an extension of government. as a branch of economics it has enjoyed the benefits of advances in that field. It has also suffered from the errors – some of them momentous – in this root field. as an extension of government, public finance has often embraced politically advantageous ideas in spite of their contradiction of sound economic thinking. Finally, developments in the field of public finance itself have sometimes aided in the development of economic theory. the relationship between economic theory, public finance, and government is quite complex.

The purpose of this paper is to appraise the developments in the history of public finance in light of the influence of economic theory and politics. for the purpose of the paper, economic theory refers to the what the author has “new subjectivism. the new subjectivism is the method of economics discovered by economists who are now called “neoclassical.” From the viewpoint of the new subjectivism, public finance is the study of how various forms of government action effect entrepreneurship.