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The Government Economic Agenda in a Society of Unequally Rational Individuals
Author(s) -
Pelikán Pavel
Publication year - 2010
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.2010.00471.x
Subject(s) - ideology , government (linguistics) , rationality , socialism , economics , positive economics , bounded rationality , liberalism , classical liberalism , economic system , public economics , political science , politics , microeconomics , law , philosophy , linguistics , communism
SUMMARY What economic roles, if any, should government play? This is still an incompletely analyzed issue that different individuals – depending on their ideologies, rent‐seeking opportunities, and analytical abilities – may answer very differently. To advance its analysis, this paper recognizes that human rationality (as empirically testable cognitive abilities) is bounded unequally across individuals, and is therefore a unique scarce resource that markets and government allocate in significantly different ways. The results conflict with ideologies of both socialism and classical liberalism, but agree with two puzzles of recent economic history and with ideological compromises in actual economic policies.