Diversity of roots
Those and other historically informed works on public economics include in-depth references to a highly diverse body of writers, apart from theorists primarily known as pioneers in public economics such as Adolph Wagner.
First, we find the names of eminent philosophers dealing with political institutions in market societies based on private property rights and contracts, or with issues of tax justice and the normative architecture of government and state. This list of thinkers includes Hobbes, Hugo Grotius, Samuel von Pufendorf, John Locke, Charles Louis de Montesquieu, Jean-Jacques Rousseau, David Hume, Immanuel Kant, Jeremy Bentham, Henry Sidgwick, John Rawls and Robert Nozick. Notice, in particular, that the list of philosophers referred to in public economics is by no means restricted to the pre-history of the subject, when economic reasoning had not developed into a discipline of its own. Beginning with early modernity, it continues throughout the centuries of enlightenment and industrialization, including the very recent past.Continuity throughout the centuries also applies to a second class of important references, consisting of pivotal figures in the history of economic analysis, including William Petty, Franςois Quesnay, Adam Smith, David Ricardo, Jean-Baptiste Say, Alfred Marshall, Knut Wicksell, Vilfredo Pareto, Abba Lerner, Paul Samuelson and Kenneth Arrow. All of them are economists of outstanding importance and at the same time contributed in specific ways to key issues within public economics: Petty provided economic arguments in favour of excise taxes on consumption, already advocated by
Hobbes and others. In that context, recurrent issues in public finance such as double taxation and considerations regarding incentive effects of taxation came to the fore. L,imp∂t unique belongs to the core of physiocratic thought.
Eleven out of 22 chapters of Ricardo’s Principles (1951) are devoted to taxation, dealing with issues of incidence and the famous equivalence theorem regarding public debt. The incidence of product taxes was analysed by Marshall with the characteristic partial equilibrium emphasis on the elasticity of supply and demand curves - still to be found in any basic textbook. In the wake of Keynes’s General Theory (1936), Lerner included macroeconomic considerations of stabilization in what he called functional finance. Samuelson (1954) formally derived the summation rule for the efficient provision of non-rival goods. Arrow inaugurated the general framework of social choice and wrote seminal pieces dealing with market failure related to the allocation of resources for invention and the provision of insurance under incomplete information, adverse selection, and moral hazard. And so on.Third, there are names closely associated with problems of the public household and the practices of the public economy, such as, Jean-Baptiste Colbert, Sebastien Le Pretre de Vauban, Johann Heinrich Gottlob von Justi, Joseph von Sonnenfels and other cameralists, or with problems of public utilities and public infrastructure from Jules Dupuit to Marcel Boiteux. Dupuit invented the user surplus criterion in the context of the evaluation of public projects, employing marginal reasoning and the summation rule for individual utilities. Boiteux dealt with the optimal pricing in cases of natural monopoly. This problem was also studied by Frank Ramsey and Harold Hotelling in the twentieth century.
Finally, some eminent contributors to public economics do not fall into any of those categories: John Stuart Mill, Arthur Cecil Pigou, James Buchanan, William Baumol, or Amartya Sen are economists concerned with issues of public economics at various levels throughout their careers, integrating advances at the conceptual, the normative, the technical, and the practical level of public economics. In that context, some nowadays less well-known currents suggesting encompassing visions of public economics deserve to be mentioned here for the sake of completion of this panoramic overview, including the French liberal school or some currents in Germany and in Italy, whose pertinent reasoning is driven by specific conceptualizations of society, state and politics: Those currents were informed by different pre-analytic visions: either by organic/romantic views and German Idealism, or by strong versions of private property individualism, or by a thoroughly strategic “Machiavellian” view of politics.