DIE FINANZWISSENSCHAFT IN DER GEGENWART

SUMMARY After World War II the economic, technological and social conditions of modern society have changed fundamentally. These evolutionary changes not only influenced the range of the activity of the State, i. e. the empirical and theoretical object of public finance since its foundation as a branch of Political Economy; it also shows a strong effect on the basic parts of modern public finance, on the normative and positive theory of public economy and on the approach of decision making process in the public sector. On the other hand, new methods and perception of this field essentially contributed to throwing new lights on fiscal functions and objectives of modern government and to solve the central problems. Yet this is only an initial step in applying the results of fiscal theory to the interdependent market and public economy. After a period of stagnation a process of theoretical foundation and economizing of this field has begun, preliminarily resulting in an amalgamation of fiscal and economic theory and in an incorporation of fiscal into economic policy. This merger logically raised the question how far this branch is to be considered a proper field of the tripartite Political Economy which—as is wellknown—is still taken as a basis of our academic institutions as well as of many textbooks. Along with the methods of research and theorizing the questions and thus the problems of this branch have changed to a degree that its traditional framework and even its name have become questionable. The label ‘public finance’ today does not cover essential parts or aspects of the objects in theory and practice sufficiently. We are interested in the principles of public economy (not primarily of public finance ) and the interrelations to the market economy, the problems thus ranging from activating and allocating a nation's resources to distributing income and wealth and, to stabilizing internal and external growth. The central aim of modern public finance is to make transparent the circular flow and the interdependence within public sector and between market and public economy by budget‐ and market theory in order to obtain results which can be successfully applied to a rational economic and general policy. The idea of an autonomous theory of public finance has indeed been overcome, although the peculiarity of political decision making renders a comprehensive theory of a nation's economy more difficult in which government activity is subdued to economic principles.