 Classical theory and the role of government. Chapter 9 in Classical Economic Theory and the Modern Economy, 2020, pp 191-201 from Edward Elgar Publishing Abstract: There is a common belief that classical economic theory was in essence laissez-faire, having virtually no role for government regulation or the public provision of infrastructure and welfare. In reality, there was universal recognition among classical economists that there was a major role for government involvement in economic matters, which in particular was spelled out in John Stuart Mill’s Principles. What classical economists did emphasize was the importance of leaving the market to work itself out where it could, and that public spending would never be a cure for unemployment, which it never has been. The lack of knowledge among modern economists about the actual views expressed within classical theory by classical economists is a major obstacle in itself in allowing not just a reappraisal of classical economic thought but also in allowing economists to make greater sense of the paths an economy takes during recession. It has also been an obstacle to the economics profession in providing useful advice on what steps to take to allow an economy to grow and prosper or to emerge from recessions, which are an inevitable occurrence. Keywords: Economics and Finance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:17468_9 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Chapters from Edward Elgar Publishing |
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