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Yes, There Are Hayekian Welfare States (At Least in Theory)


  • Andreas Bergh


The neoclassical problem of distortionary taxation and the Hayekian knowledge problem are two different lines of argumentation against government interventions. When it applies, the Hayekian argument against government intervention is stronger than the neoclassical argument, because interventions can be designed to minimize distortions, but governments cannot escape the knowledge problem. A Hayekian welfare state would combine low levels of regulation with social insurance schemes that are not terribly vulnerable to the knowledge problem.

Suggested Citation

  • Andreas Bergh, 2015. "Yes, There Are Hayekian Welfare States (At Least in Theory)," Econ Journal Watch, Econ Journal Watch, vol. 12(1), pages 22-27, January.
  • Handle: RePEc:ejw:journl:v:12:y:2015:i:1:p:22-27

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    References listed on IDEAS

    1. Andreas Bergh, 2014. "Sweden and the Revival of the Capitalist Welfare State," Books, Edward Elgar Publishing, number 15717.
    2. Hansson, Ingemar, 1984. " Marginal Cost of Public Funds for Different Tax Instruments and Government Expenditures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 86(2), pages 115-130.
    3. Cecil E. Bohanon & John B. Horowitz & James E. McClure, 2014. "Saying Too Little, Too Late: Public Finance Textbooks and the Excess Burdens of Taxation," Econ Journal Watch, Econ Journal Watch, vol. 11(3), pages 277-296, September.
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    More about this item


    Welfare state; regulatory state; regulation; redistribution; economists; Friedrich Hayek;

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics


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