Musgrave (14 December 1910-15 January 2007) was born into a family with partially Jewish background in Konigstein im Taunus, a small town north of Frankfurt am Main. In his family, endorsement of liberal and cosmopolitan ideals was accompanied by Anglophile sentiments.

His father, Curt Abel-Musgrave, held a degree in chemistry, but published widely on socio-political themes and was a translator for his friends Sir Arthur Conan Doyle and Rudyard Kipling, while the writings of his grandfather, Carl Abel, include German translations of Shakespeare.

Richard Abel Musgrave’s scholarly achievements in combining heterogeneous traditions and “translating” economic concepts from German-language public economics to Anglo-Saxon market failure theory have a background in the cosmopolitan stance as well as in the sense of the value of plurality and wider horizons characteristic of his family. Autobiographical notes inform us about Richard’s youthful hopes for the Weimar Republic, “that ill-fated yet noble experiment in German democracy” (Musgrave 1986, 1: vii). In 1930, he went to the University of Munich to begin his study of economics. Here he heard Adolf Weber lecturing on economics along the lines of Cassel’s (1923) Theory of Social Economy, and was impressed by Otto von Zwiedeneck-Sudenhorst, an Austrian economist renowned for publications on social policy and wages whose teaching programme included capital theory a la Bohm-Bawerk. Lasting influences date back to his Heidelberg years (1931-33) where he earned his diploma degree in 1933. Three names stand out: Jacob Marschak (whose work with Emil Lederer and the Kiel Institute contributed to a timely emphasis on macroeconomic problems, making Musgrave aware of stabilization as a core function of government); Alfred Weber (who gave seminars discussing the contributions of his brother Max, whose reasoning on fact and value in social science remained a fixed point of Musgrave’s thought); and Otto Pfleiderer, the author of a book on public sector-related accounting containing a crisp summary of the German-language literature on the conceptual basis of social wants and public goods.

The intellectual and political environment of the Heidelberg economics department (which under Weber’s leadership was clearly anti-Nazi) was congenial to his father’s foresight in leading to Musgrave’s successful application for a fellowship of the International Institute of Education, which brought him to the University of Rochester in the USA in fall 1933. Having been trained there in Marshallian economics, he moved to Harvard where he became a member of a group of brilliant graduate students, among them Paul Samuelson. Musgrave received his MA in 1936 and his PhD in 1937. He became a US citizen and served on the Board of Governors of the Federal Reserve System, eventually as assistant to Chairman Marriner Eccles. He returned to academia in 1947, teaching first at Swarthmore College. Musgrave moved to the University of Michigan at Ann Arbor in 1949, where he worked on what was to become his magnum opus (Musgrave 1959) in a stimulating intellectual environment, including theorists such as Kenneth Boulding, Wolfgang Stolper and Lawrence Klein. Positions at Johns Hopkins University (1958-61) and Princeton preceded Musgrave’s return to Harvard in 1965, where he retired in 1981.

Musgrave (1986, 1: viii) summarizes his early work on public good provision as a PhD student in Harvard (culminating in Musgrave’s 1939 seminal paper on public goods) in the following way: “In contrast to the Lindahl model, the Pigovian framework offered an alternative approach, and the puzzle was how to merge the two strands”. Indeed,

an outstanding characteristic of Musgrave’s achievements is his ability to integrate distant paradigms and approaches: the organization of synthesis. He is aware of his specific background: “I could claim the comparative advantage (and what an advantage it was) of acquaintance with the continental literature - Austrian, Italian, and Swedish” (Musgrave 1986: viii). It was an absolute advantage and the starting point for public good theory as the core micro base of the public sector: the concepts of public (that is, non-excludable and non-rival) goods and of merit wants were foreign to the Anglo-Saxon tradition, whose pertinent reasoning since Hume was based solely on nonexcludability.

Pigou introduced externalities as the core concept of market failure, but public good theory was not further developed.

Musgrave (1996: 149) writes that he “likes to think that his own initial paper on the Wicksell-Lindahl model... helped to bring the problem to Paul Samuelson’s attention, then a fellow graduate student at Harvard” who derived the summation rule for non-rival goods in the 1950s. In Musgrave (1959) public goods and merit wants are integrated in the market failure framework. Musgrave was aware of the tension embodied in the concept of merit wants in the context of neoclassical economics. While sticking to the project of an individualistic explanation of the public sector, he takes seriously the arguments of German writers who emphasized the limits of purely individualist accounts of the state: certain valuations, particularly regarding basic patterns of core public institutions in areas such as law enforcement, defence or education, cannot be fully understood in terms of purely individualist consumer preferences. Individual valuations regarding those issues make sense if, and only if, individuals are considered as members of communities. In addition, consumer sovereignty may be a problematic assumption in cases of endogenous preferences (addictive goods, learning-by-using intensive goods), or of systematic cognitive difficulties of the kind recently stressed by advocates of “libertarian paternalism”. To capture all those concerns, Musgrave suggested the concept of merit wants.

Concerning the overall development of modern public economics, a further dimension of Musgrave’s contribution must be stressed; he suggested the well-known architecture of the branches of the public sector as three naves of the cathedral: allocation, distribution, and stabilization, which partly complemented and partly superseded the traditional distinction of revenue and expenditure side of the public budget related to a narrower conception of public finance. As put by Musgrave (1983), one or the other “chapel” (such as fiscal federalism, to be further pursued by his student Charles Tiebout) was added to this cathedral in the course of time.

Musgrave’s approach to synthesis is clearly combinatorial rather than amalgamating. He prefers a transparently organized cathedral (with three naves and several chapels, to use his own metaphors) to a monolithic building whose complex structuring elements are hidden behind a more or less richly ornamented faςade. A quick look to the table of contents of Musgrave (1986), a two-volume collection of his articles, shows that he provided contributions to almost all of the concepts, issues and questions which turned out to be important within the encompassing edifice of modern public economics. Musgrave stresses issues of distribution in the 1980s and 1990s when allocation theory carried the day, whereas he emphasized the role of the state regarding allocation in the late 1950s, when “the theory of Public Finance has been dominated by the study of the effects of fiscal policy upon the levels of income, employment and prices.” (Musgrave and Peacock 1958: ix).

Musgrave’s overall theoretical architecture has profound implications for the view of the relation between state and market. “To ask by how much the state should be restrained... leaves the state as the defendant who must prove his innocence”, says Musgrave (for example, Buchanan and Musgrave 1999: 129) and argues that this perspective is flawed. Instead, he sticks to the German tradition of conceptualizing the state as a set of institutions complementary to the market system (ibid.: 37). While admitting the dangers of distortions in the public sector, Musgrave insists that integrating policy failure into the modelling premises is theoretically unsound, and that the propagation and popularization of suchlike views in the last quarter of the twentieth century “has been destructive of good government” (ibid.: 1999: 35). A priori pessimistic visions of public choice mechanisms are not appropriate, while at the same time using idealized models of market exchange. He thinks that we should aim at a neutral framework in which distortions/imperfections related to both types of institutions may be dealt with symmetrically.

Following Wicksell (1896), for Musgrave the logic and problems of political provision belong to the core of the theory.

Last but not least, Musgrave was not only an architect of and a prolific contributor to modern public economics, but also one of its most eminent historians. Regarding “that most exciting aspect of history which is the history of ideas” (Musgrave 1983: 1), he is not only “historian by osmosis” (a term self-referentially invoked with characteristic understatement as “the prime benefit of growing older”): his seminal paper on “The voluntary exchange theory of the public economy” (1939) employs the history of ideas in the development of theory, dealing with pertinent contributions of Sax, Wicksell (1896) and Lindahl (1919). In The Theory of Public Finance, Musgrave (1959) succinctly summarizes the historical background of key concepts in carefully crafted footnotes. The introduction to the collection Classics in the Theory of Public Finance (Musgrave and Peacock 1959) consists of the most useful ten pages for anybody who seeks a first orientation with respect to the various paths along which modern public economics developed from the diverse traditions of the nineteenth century. In more recent contributions, Musgrave (1983, 1996) systematically deals with the emergence of modern public economics as well as with its pre-history, particularly the role of German, Austrian, Italian and Swedish influences. “With the ’20s, what has here been called the tradition of Finanzwissenschaft had largely come to an end. When German economists resumed fiscal analysis after the close of the war it was in the spirit of the English language model”, writes Musgrave (1996: 164). This is rather downplaying Musgrave’s own role in bringing about the foundational synthesis of modern public economics.

Richard Sturn

Musgrave (14 December 1910-15 January 2007) was born into a family with partially Jewish background in Konigstein im Taunus, a small town north of Frankfurt am Main. In his family, endorsement of liberal and cosmopolitan ideals was accompanied by Anglophile sentiments.

More on the topic Musgrave (14 December 1910-15 January 2007) was born into a family with partially Jewish background in Konigstein im Taunus, a small town north of Frankfurt am Main. In his family, endorsement of liberal and cosmopolitan ideals was accompanied by Anglophile sentiments.: