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2018 | OriginalPaper | Buchkapitel

44. Can There Be Such a Thing as Legitimate Public Debt in Democracy? De Viti de Marco and Buchanan Compared

verfasst von : Giuseppe Eusepi

Erschienen in: James M. Buchanan

Verlag: Springer International Publishing

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Abstract

The chapter explores the background of public debt theory by contrasting the Anglo-Saxon tradition as embodied in the Ricardian (1821) equivalence theorem and the Italian tradition as embodied in de Viti de Marco’s (1893, 1898) non-equivalence theorem. Moreover, it highlights the key role that de Viti de Marco played in inspiring Buchanan’s (1969) theory of public debt. Specifically, it concentrates on the quality of public expenditures in a contractarian constitutional setting and asks whether, under certain budget conditions, debt financing can be justified. An effort is made at exploring the rationale for explaining the genesis of this apparently biased view and attention is drawn to how de Viti’s distinction between productive and unproductive expenses has an impact on both the ethics of debt and the ethics of default.

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Vorheriges Kapitel The Irresistible Attraction of Public Debt

Nächstes Kapitel Consequences of the Anachronism of Fractional Reserve Arrangements

A select group of thinkers that included also Mosca (1939 [1896]) and Pareto (1935 [1923]). Mosca (1939 [1896]) enthusiastically developed the notion of “the few govern the many” and Pareto developed the distinction between logical and non-logical actions. See Burnham, J. (1943), The Machiavellians: Defenders of Freedom. New York: The John Day Company Inc.

O. Morgenstern (1968).

The generality principle is invoked in the text to highlight that in democracy nobody suffers a negative result.

On this point see further sections “Contractarian Constitutionalism and Debt” and “Contractarianism, Debt and Default”.

De Viti de Marco (1898, Section 23, p. 114).

J. M. Buchanan (1958).

A. de Viti de Marco (1936, pp. 116–117).

J. M. Buchanan (1999 [1958]).

See G. Eusepi and R. E. Wagner (2017), especially Chapter 1.

J. M. Buchanan (1999 [1958], p. 5).

J. M. Buchanan (1999 [1958], p. 26).

J. M. Buchanan (1969).

A. de Viti de Marco (1898, Chapter 4, Section 24, p. 116).

A. de Viti de Marco (1898).

G. Eusepi and R. E. Wagner (2018).

A. de Viti de Marco (1898, Book 3, Section 20, p. 107). This point was popularized in the USA by Samuelson (1948), who, however, misses to observe that self-extinction requires a cooperative state and is not a common occurrence. Economics—An Introductory Analysis. New York: McGraw-Hill Education.

J. M. Buchanan (1989, Chapter 4, pp. 32–46).

Brennan and Eusepi (2016, pp. 55–73).

De Viti de Marco, A. (1893, p. 1).

On this see A. de Viti de Marco (1893, p. 42).

A. de Viti de Marco (1898, p. 13).

See J. M. Buchanan (1969, p. 55). See also G. Eusepi (1991, pp. 144–145).

On this point see J. M. Buchanan and R. E. Wagner (1977).

A. de Viti de Marco (1893, pp. 42–43). What stated in the text applies to private credit, which is a simple dyadic voluntary exchange. It does not apply to governments where exchange is forced or triadic.

On this point see Eusepi and Wagner (2018, pp. 13–15).

B. Griziotti (1917).

Brennan, G., & Eusepi, G. (2002, November). The Dubious Ethics of Debt Default. Public Finance Review, 30(6), 546–561.

Brennan, G., & Eusepi, G. (2016). Hobbesian and Contractarian Constitutions. In A. Marciano & G. B. Ramello (Eds.), Law and Economics in Europe and the U.S.: The Legacy of Juergen Backhaus (pp. 55–73). New York: Springer.

Buchanan, J. M. (1958). Public Principles of Public Debt. Homewood, IL: Richard D. Irwin.

Buchanan, J. M. (1960). “La Scienza delle Finanze”: The Italian Tradition in Fiscal Theory. In Fiscal Theory and Political Economy. Selected Essays (pp. 24–74). Chapel Hill: The University of North Carolina Press.

Buchanan, J. M. (1968). The Demand and Supply of Public Goods. Chicago: Rand-McNally.

Buchanan, J. M. (1969). Cost and Choice; An Inquiry in Economic Theory. Chicago: Markham Publishing Company.

Buchanan, J. M. (1989). Essays on the Political Economy. Honolulu: University of Hawaii Press.

Buchanan, J. M., & Wagner, R. E. (1977). Democracy in Deficit: The Political Legacy of Lord Keynes. New York: Academic Press.

Buchanan, J. M., & Congleton, R. D. (1998). Politics by Principle, Not Interest: Towards Nondiscriminatory Democracy. New York and Cambridge: Cambridge University Press.CrossRef

Burnham, J. (1943). The Machiavellians: Defenders of Freedom. New York: The John Day Company Inc.

De Viti de Marco, A. (1893). La pressione Tributaria dell’Imposta e del Prestito. Bologna: Tipografia Fava e Garagnani.

De Viti de Marco, A. (1898). Saggi di economia e finanza. In Giornale degli Economisti (pp. 61–123). Roma.

De Viti de Marco, A. (1936). First Principles of Public Finance. London: Jonathan Cape.

Eusepi, G. (1991, March). Before and After Cost and Choice. Journal des Economistes et des Etudes Humaines, 2(1), 135–149.

Eusepi, G., & Wagner, R. E. (2013, Spring). Tax Prices in a Democratic Polity: The Continuing Relevance of Antonio de Viti de Marco. History of Political Economy, 45(1), 99–121.

Eusepi, G., & Wagner, R. E. (2017). Public Debt. An Illusion of Democratic Political Economy. Cheltenham, UK and Northampton, MA: Edward Elgar.

Eusepi, G., & Wagner, R. E. (2018). De Viti De Marco vs. Ricardo on Public Debt: Self-Extinction or Default? In G. Eusepi & R. E. Wagner (Eds.), Debt Default and Democracy. Cheltenham, UK and Northampton, USA: Edward Elgar.

Griziotti, B. (1917). La diversa pressione del prestito e dell’imposta. Giornale degli Economisti e Rivista di Statistica, 54(3), 313–334.

Morgenstern, O. (1968). Antonio De Viti de Marco. In D. L. Sills (Ed.), International Encyclopedia of the Social Sciences (Vol. 4). New York: Macmillan Publishers and The Free Press.

Mosca, G. (1939 [1896]). The Ruling Class. New York: McGraw-Hill Education.

Pareto, V. (1935 [1923]). The Mind and Society. New York: Harcourt Brace.

Ricardo, D. (1821). On the Principles of Political Economy and Taxation. London: John Murray.

Samuelson, P. A. (1948). Economics—An Introductory Analysis. New York: McGraw-Hill Education.

Titel: Can There Be Such a Thing as Legitimate Public Debt in Democracy? De Viti de Marco and Buchanan Compared
verfasst von: Giuseppe Eusepi
Verlag: Springer International Publishing
Buch: James M. Buchanan
Print ISBN: 978-3-030-03079-7

Electronic ISBN: 978-3-030-03080-3

Copyright-Jahr: 2018
DOI: https://doi.org/10.1007/978-3-030-03080-3_44