Knut Wicksell: Zum Geburtstag des Begründers einer kritischen Vertragstheorie

On the occasion of his 150th birthday this paper serves the purpose of honouring Knut Wicksell. First, the life and work of Wicksell is portrayed. Subsequently, the attention is directed to his central contribution to the theory of taxation. The contemporary economic contract theory mainly rests upon the principle of unanimity developed by Wicksell. This principle is apt to guide the citizens’ search for mutual gains from cooperation through the provision of public goods. Wicksell is presented as the founder of a “critical contract theory”. Such a critical contract theory must comprise three basic elements: Firstly, its reasoning has to be strictly individualistic. Secondly, it has to be, pertaining to the finding of public functions and to the provision of public goods, in search of a procedural as opposed to an outcome oriented justice. Thirdly, a critical contract theory should not lose sight of social and distributive issues. In this contribution it is suggested that all three elements of the critical contract theory are rooted in Wicksell’s work. Even though Wicksell develops what I prefer to call the concept of “Productive Rules for Redistribution” and thereby approximates a solution for the problem of distribution, he himself remains remarkably pessimistic about the solvability of the problem of a just distribution. After careful consideration it strikes that Wicksell did not explicitly consider the costs of decision making. In this regard, the paper concludes by offering a range of possibilities for future research.